Yesterday, Fed Chair, Powell’s presser offered little fresh news, but the very fact that he offered no new stimulus measures may have had a dent on risk with EURUSD also seeing some selling after peaking out at the 1.1800 figure yesterday.

The eco front today EU GDP came in worse than even expected with year over year figure printing at -11.7% versus -10.9% eyed. The figure wiped a decade of growth from the region, as almost every country in the EU came to a standstill in Q2 battling COVID.

On the bright side, German unemployment improved with unemployed actually declining by -18K versus a forecast of 44K rise. The news suggests that Europe’s largest economy has stabilized and the slow turn towards growth is taking shape as we head into the second half of the year.

Unemployment will be a key focus for North American traders as markets look at the weekly jobless claims to make sure that the numbers do not rise materially. The bounceback in the US recovery has clearly hit a headwind as many key Southern states have had to scale back their re-openings due to fresh outbreaks of virus. More importantly, US consumer behavior may have retrenched due to revived fears of infection and all of that may have had an impact on labor demand.

In addition to jobs, the market will also see US Q2 GDP data which is expected to print at a whopping -34.1% for the quarter. Although the numbers are clearly backward-looking they may have still have an impact on trade if they prove to be worse than anticipated as the gaping hole in growth left by COVID lockdowns may be much harder to fill than the current market expectation, providing fresh reasons for bears to push equities lower as the day proceeds.

Author

Boris Schlossberg

BKTraders and Prop Traders Edge

Boris Schlossberg was key speaker at the FXstreet.com International Traders Conferences 2010. Mr. Boris Schlossberg is a leading foreign exchange expert with more than 20 years of financial market experience.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.