The last week of August won’t lack entertainment, with plenty of data coming from Europe and the US. But beyond data, is pretty clear that the greenback is on a bullish trend, particularly against its European rivals, with the dollar rising on good news, steadied with bad ones, and gaining again on risk aversion times, so trading accordingly, waiting for retracements to buy, or adding on breakouts will probably be the best way to deal with it over the upcoming days.
Among the most notorious facts of these past five days, is the steady slide in Pound, closing its 7th week to the downside against the greenback: data has been missing expectations, with inflation down to 1.6% yearly basis being the main reason of this week fall; market disappointment was strong enough to dilute the positive effect BOE minutes would have had in a different scenario, with 2 members voting now for a rate hike. Nevertheless, risk of an upward correction these upcoming days is quite high, more from a technical than from a fundamental point of view: as mentioned above the pair has fall for 7 weeks in row, and would be extremely unlikely the movement extends without any correction.
Back to the future, Monday will offer the German IFO survey, which will bring some light over the health of the country, while later on the day focus will be on US PMI and housing data. On Tuesday Durable Goods orders and consumer confidence in the US will gather the attention; for all of the above data, consider the movements will be larger if they favor the greenback, bad in Europe good in the US, that if data goes against dollar technical strength.
Thursday will be the most uploaded day, with loads of data in Europe, the US and Japan: in Europe, German employment figures and inflation, and EZ confidence indexes are the most relevant, any expected to surprise to the upside and therefore implying more pressure over the common currency. Later on the day, we will have US Preliminary GDP readings, expected around 3.9%. Being the first number of the quarter is usually the most relevant of the 3 quarterly GDP reviews, and therefore, it needs to be above 4.0% to give dollar sustainable strength.
Asian session will be overloaded with Japan inflation, unemployment, industrial production and retail sales, some already review to the downside on previous readings: yen weakness has outstood among majors lately, and weak data should see the Japanese currency extending its decline with chances of USD/JPY advances towards the year high of 105.46.
Friday finally, will be another day uploaded with European data, but market attention will focus for the most in the EZ inflation numbers: at 0.4% yearly basis, a reading below this last will doom the region to deflation, and probably trigger a strong a selloff in the EUR, particularly against stronger USD and AUD.
The most exciting news however, is the end of the summer vacations in the north hemisphere, which at the end will mean an increase in intraday trading volumes.
Among the most notorious facts of these past five days, is the steady slide in Pound, closing its 7th week to the downside against the greenback: data has been missing expectations, with inflation down to 1.6% yearly basis being the main reason of this week fall; market disappointment was strong enough to dilute the positive effect BOE minutes would have had in a different scenario, with 2 members voting now for a rate hike. Nevertheless, risk of an upward correction these upcoming days is quite high, more from a technical than from a fundamental point of view: as mentioned above the pair has fall for 7 weeks in row, and would be extremely unlikely the movement extends without any correction.
Back to the future, Monday will offer the German IFO survey, which will bring some light over the health of the country, while later on the day focus will be on US PMI and housing data. On Tuesday Durable Goods orders and consumer confidence in the US will gather the attention; for all of the above data, consider the movements will be larger if they favor the greenback, bad in Europe good in the US, that if data goes against dollar technical strength.
Thursday will be the most uploaded day, with loads of data in Europe, the US and Japan: in Europe, German employment figures and inflation, and EZ confidence indexes are the most relevant, any expected to surprise to the upside and therefore implying more pressure over the common currency. Later on the day, we will have US Preliminary GDP readings, expected around 3.9%. Being the first number of the quarter is usually the most relevant of the 3 quarterly GDP reviews, and therefore, it needs to be above 4.0% to give dollar sustainable strength.
Asian session will be overloaded with Japan inflation, unemployment, industrial production and retail sales, some already review to the downside on previous readings: yen weakness has outstood among majors lately, and weak data should see the Japanese currency extending its decline with chances of USD/JPY advances towards the year high of 105.46.
Friday finally, will be another day uploaded with European data, but market attention will focus for the most in the EZ inflation numbers: at 0.4% yearly basis, a reading below this last will doom the region to deflation, and probably trigger a strong a selloff in the EUR, particularly against stronger USD and AUD.
The most exciting news however, is the end of the summer vacations in the north hemisphere, which at the end will mean an increase in intraday trading volumes.
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