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Eurozone Consumer Prices in Good Growth

A guest post written by DAR Wong

Currency Market Observations – 5 September 2017

Fundamental Outlook

The U.S. weekly claims for jobless benefits stay consistent but monthly payroll expands at slower pace. China stays robust in manufacturing sector. U.K. economy still behaves firm despite BREXIT policy just begins.

The U.S. Conference Board of consumer confidence rose to 122.9 in August and better than expectation. Prelim GDP for Q2 rose 3.0 percent and better than 2.6 percent in previous quarter.

The U.S. weekly claims stayed unchanged at 236,000 in the week ended 26 August. Personal spending grew 0.3 percent and highest in past 3 months. Another report on pending homes sales slid 0.8 percent and fell short of positive expectation.

American nonfarm payroll added below expectation in August at 156,000 after it was revised 189,000 in July. Unemployment rate at 4.4 percent and stayed consistent. Another report on Institute of Supply Management’s manufacturing index grows 58.8 in strong momentum after August rose 56.3.

China’s manufacturing index stayed resilient in August at 51.7 while services index floated at 53.4. China’s Caixin manufacturing index stays strong at 51.6 in September.

Japan’s household spending contracted 0.2 percent in July unexpectedly against a positive consensus. Unemployment rate remained steady at 2.8 percent. Retail sale grew 1.9 percent in July on year comparison and highest record in past 5 months.

Eurozone’s consumer prices in August rose 1.5 percent on year at strong demand growth while core consumer prices advanced 1.3 percent from a year ago.

The U.K. net lending to individual grew GBP4.8 billion in July compared to revised GBP5.5 billion in June. Another report on mortgage approvals rose 69,000 in July and best record in past 6 months. Markit report the U.K. manufacturing index rose 56.9 in August after the July was revised to 55.3.

Technical Forecast

USD/JPY traded in short-covering trend last week after bounced off 108.40 bottom. This week, the trend should continue to trade firmer with support rising at 109.50 level. Topside target aims at 111.20 in case of bullish factor but will be resisted at EMA200 line on day-chart.

EUR/USD traded in sideways last week after topped off 1.2070 high. Market is strengthening due to Dollar weakening in correlational factor. This week, we forecast the trend will consolidate from 1.1750 to 1.2000 range. However, beware of breaking the resistance that may climb higher to 1.2250 area.

GBP/USD traded in small range before the weekend in mixed sentiment. This week, we reckon the market behavior will continue while moving from 1.2850 – 1.3050 range. Market traders are staying alert on Pound movement as BREXIT effects have not really slip into the market trend yet.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 






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