EUR/USD Forecast: waiting for US data at yearly lows

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1325

Renewed tensions between Turkey and the US keep underpinning the USD.
Retail Sales seen up monthly basis, strength expected in the core reading.

The EUR/USD pair holds near a fresh yearly low of 1.1316, a level reached after Turkey announce retaliation tariffs on the US, after the country´s "deliberate attacks" on the local economy, reviving fears of contagion and fueling demand for the greenback. According to Turkey’s official gazette, tariffs were doubled on several US goods, and are now as high as 140% in some products such as alcohol. The pair bounced with London opening, but selling interest capped the advance around 1.1345, so far the daily high, now trading mid-way, amid some EU countries being off on holidays and as investors wait for the release of US Retail Sales.

US Retail Sales are expected to post a modest advance of 0.1% in July, following a 0.5% advance in the previous month. The closely watched Retail Sales Control Group, a core reading that excludes auto, gasoline and construction materials, remained flat in the previous month and is now foreseen up 0.4% in July.

In the meantime, European indexes are bearing quite well with escalating tensions in Turkey, with most local indexes trading up for the day, while the greenback holds firm across the board. Commodities, on the other hand, are back under pressure with gold extending its slump to fresh yearly lows.

The EUR/USD pair trades a handful of pips above the mentioned low, and technically bearish according to intraday technical readings, despite also overbought. In the 4 hours chart, the 20 SMA maintains its sharp downward slope above the current level, now down to 1.1385, while technical indicators turned flat, reflecting the ongoing range, but well into the red, with the RSI currently at around 29. The 1.1360 price zone, in where the pair bottomed Monday, is the immediate resistance, with bears keeping full control as long as the price remains below it. 1.1311, on the other hand, is July 2017 monthly low, and the key support as a break below the level should lead to another leg lower toward the 1.1250 region.

Support levels: 1.1310 1.1280 1.1250

Resistance levels: 1.1360 1.1385 1.1420

View Live chart for the EUR/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.