Euro rises against peers as industrial production improves
|The British pound declined against the US dollar as traders reacted to mixed economic data from the United Kingdom. Data from the ONS showed that the economy contracted by 19.1% in the three months to May this year. This number was weaker than the consensus estimates of -17.4% and the previous decline of 10.4%. On a positive note, the economy expanded by 1.8% in May after falling by 20.4% in the previous month. Analysts were expecting the economy to jump by 5.5%. Other numbers disappointed also with construction output rising by 8.2%, manufacturing by 8.4% and industrial production by 6%.
The euro rose against the US dollar as traders reacted to upbeat economic data from Europe. According to Eurostat, industrial production rose by 12.4% in May after falling by 18.2% in the previous month. This number was worse than the 15% that analysts were expecting. The production declined by 20.9% on an annualised basis. Other positive data came from ZEW, which found that economic sentiment improved in July. The number came in at 59.6 from the previous 58.6. In Sweden, the headline CPI rose by 0.7% while CPI at constant interest rose by 0.6% in June.
The US dollar declined slightly as traders reacted to inflation data from the United States. According to the Bureau of Labour Statistics, the headline CPI rose by 0.6% in June after rising by 0.1% in the previous month. The core CPI, which excludes the volatile food and energy products rose by 1.2% year-on-year. The closely-watched real earnings number declined from 0.5% to -2.3%. The biggest risk for the current growth of the American economy is that the number of COVID-19 cases has continued to rise. That has led some states like California and Oregon to roll back some of their previous stay-at-home orders.
EUR/USD
The EUR/USD rose to an intraday high of 1.1376, which is the highest it has been since June 11. On the four-hour chart, the price is above the short and medium-term moving averages while the moving average of oscillator has continued to rise. It is also above the ascending trend line that is shown in white. Also, the price has formed an ascending triangle. Therefore, the upward trend will continue rising as bulls target the next support at 1.1400.
GBP/USD
The GBP/USD pair declined to an intraday low of 1.2505. On the four-hour chart, the price is slightly below the 50-day and 100-day exponential moving averages. The momentum indicator has been falling while volatility has continued to decline. The price is also along the 38.2% Fibonacci retracement level. Therefore, the pair may continue falling as bears target the next support at 1.2443.
USD/JPY
The USD/JPY pair rose to an intraday high of 107.42, which is slightly above the 50-day and 100-day EMAs. The signal and main line of the MACD has moved above the neutral line. The RSI has moved from the oversold level of 30 to 58. The pair may continue to rise as bulls target the next target at 107.81.
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