The U.S. dollar was subdued on Friday, as the ICE U.S. dollar index dropped 0.3% on the day to 96.81. Chicago Fed President Charles Evans said a couple of rate cuts should be considered to lift inflation. Today, the day has begun with Chinese GDP data. China’s industrial output fell in June from a 17-year low in the previous month. June retail sales mounted 9.8% from a year earlier, versus the 8.3% forecast.
That was one of the most important economic data driving the market sentiment today, what’s next? Let’s find out…
Economic Events to Watch Today
EUR/USD – Daily Analysis
The euro gained 0.2% to $1.1271. Official data showed that the eurozone’s industrial production grew 0.9% on month in May (vs. +0.2% expected). The EUR/USD currency pair is trading slightly bullish in a consolidation range of 1.12850 – 1.12430. The EUR/USD currency pair hit the bullish track around 1.1240 to test the 1.1275 resistance.
The U.S. dollar seems to be under pressure as it wiped-off upbeat U.S. producer price Index led increases and drops sharply against its competitors after the Federal Reserve official reinforced aggressive expectations by Federal Reserve rate cuts in the upcoming months.
Moreover, the single currency Euro also received support from upbeat Eurozone industrial production values, which is increased by 0.9% in May.
Daily Support and Resistance
Pivot Point 1.1261
EUR/USD – Trade Tip
Let’s keep an eye on 1.1261 support as the violation of this level can bring further selling until 1.1240. While above 1.1270, the pair can stay bullish until 1.1280.
GBP/USD – Daily Analysis
During the Asian session, the British pound climbed 0.4% to $1.2575, posting a three-day rebound due to lack of fresh catalysts. Markets are still confined before the key employment data which is scheduled for release this week.
Meanwhile, the risk condition continues to stay soft with the 10-year US yields presently staying strong at 2.124%.
The U.S. Dollar instability takes its signs from last dovish speech by Federal Reserve Chairman Powells that gave a boost to expectations of easy money from the US central bank due to the back of futures rate cuts.
On the flip side, Boris Johnson is continuously gaining support from the British political organization for the elections of Prime Minister, although he is ready to trigger Hard Brexit.
Daily Support and Resistance
Pivot Point 1.256
GBP/USD has violated the bearish channel at 1.2480 which is one of the major indications of a bullish bias among traders. For the moment, the cable trades at 1.2535 where it’s likely to face resistance at 1.2540. The bullish breakout of this level can extend the buying trend until 1.2595.
GBP/USD – Trade Tip
Consider staying bearish below 1.2560 and bullish above the same level to target 1.2610 on the upper side and 1.2520 and 1.2465 on the lower side. All the best!