Daily Forex Analysis
|The weak U.S. housing data showed that the annual rate of new home starts in June was -0.9, compared with -0.7 and -0.9. The monthly rate of U.S. building permits (%) for June was actually reported at -6.1, with a forecast of 0.1 and a previous estimate of 0.7.
The dollar index fell slightly and is expected to remain volatile ahead of the Fed's interest rate decision at the end of the month, with support at the 97.00 level below and pressure at 97.50 above.
As the dollar index retreated, the euro was supported at 1.1200 USD. And if it broke below effectively, it was supported around 1.1150, with top pressure at 1.1250.
The pound hit an intraday low of 1.2382 against the dollar. It’s the lowest level since April 10, 2017, as the market continued to price in the growing risk of Britain leaving the EU without a deal, but then bounced back above 1.2400. Further weakness in sterling cannot be ruled out, given that economic data also suggest the UK economy is struggling to gain traction, increasing pressure on the bank of England to ease monetary policy.
The short-term pressure above is 1.2440, the pressure above is 1.2500. The short-term support below is 1.2350, and the short-term support below is 1.2300.
XAU/USD
US housing starts fell for the second month in a row and building permits fell to their lowest level in two years, signaling a continuing slump in the housing market despite lower mortgage rates. In addition, the IMF said in its latest report that the dollar's real effective exchange rate is expected to be 6-12 percent overvalued relative to U.S. fundamentals. The real effective exchange rate of the dollar rose 4 per cent in 2018 and 3.4 per cent again in May 2019, after falling 7 per cent in 2017.
Fueled by massive buying, the COMEX's most active gold futures contract traded 4,072 contracts worth nearly $578 million at 23:01 Beijing time, data showed. International spot gold climbed sharply, breaking through the $1,420 an ounce barrier and pulling more than $20 from a session low. The upper pressure is in the 1425-1430 range, and if New York closes above 1430, there is a high probability of breaking the previous high of 1439.02. Lower short-term support around 1410.
USO/USD
U.S. commercial crude stocks excluding strategic reserves fell 3.116 million barrels to 455.9 million barrels in the week ended July 12, EIA data showed. Gasoline inventories increased by 3.565 million barrels and refined oil inventories increased by 5.686 million barrels. Domestic oil production fell by 300,000 barrels a day last week to 12 million barrels a day. After the data release, New York crude oil pressure dipped to 57.00, if effectively below the 57 level will slip to 55 line, pressure above 58.
PS: Today focus
16:30 monthly retail sales rate after June quarter adjustment (%)
20:30 Initial jobless claims for the week ended July 13 (10,000)
02:15 John Williams, permanent voting member of the U.S. federal reserve committee and President of the New York fed, speaks at the 2019 annual meeting of the association of central bankers.
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