The US dollar kept a near a one-week low against most major peers on Monday, after falling the most in almost seven weeks on Friday as diving US consumer confidence affected expectations for an early tightening of Federal Reserve policy.
The dollar index, which measures the US Dollar against its six major rivals, moved a little at 92.528, maintaining a 0.50% tumble from the end of last week. It dipped as far as 109.455 yen for the first time since Aug. 5 on Monday, before trading 0.13% weaker at 109.465. Against the euro, it was mostly flat at $1.17960, close to the one-week low of $1.18045 reached Friday.
The US’s core inflation, rose by 0.3% last month, shy of a forecasted 0.4% increase and well below June’s rise of 0.9%. The core figure is up 4.3% over the last year, a slight deceleration from June’s 4.5%.
A University of Michigan survey released at the end of last week showed consumer sentiment sliding to the lowest level since 2011 amid an acceleration in COVID-19 infections caused by the fast-spreading Delta variant. U.S. retail sales data due Tuesday will be closely watched for further clues on consumer behaviour. “Does the survey signal an imminent turn in the U.S. economy? We doubt it given vaccine efficacy remains high and the hit to sentiment likely means more people will get vaccinated
This week economic data will be slower due to the last summer holidays in August. The major news announcements will be:
On Tuesday the monthly Core Retail Sales and monthly Industrial Production will be released.
Early Wednesday, the New Zealand’s Official Cash Rate and Rate Statement will be released. Later on, the UK yearly CPI and the Canadian monthly CPI will be released. At night the US FOMC Meeting Minutes will be held.
Early Thursday the Australian Employment Change and Unemployment Rate will be released which are expected to increase. Later in the day the US Philly Fed Manufacturing Index and Unemployment Claims will be released.
On Friday the UK and Canadian monthly Retail Sales will be released.
Major Currencies Performance and Signals
EUR/USD
The EUR/USD bounced off a support level created on 29th March to end the week in positive territory, possibly setting us up for another positive week, although the long-term picture looks bearish.
FORECAST: SELL
Resistance: 1.1800, 1.1850, 1.1900
Support: 1.1750, 1.1700, 1.1650
GBP/USD
Last week, the price trended down for most of the week before having a bullish Friday to leave it near where it opened for the week. In that sense, our commentary on this pair is almost identical to the previous week, but because it is sitting in a long-term resistance area with the potential to breakout, we want to highlight it again.
We want to see the price break the support at 1.3670 to be more confident of our bearish sentiment
FORECAST: SELL
Resistance: 1.3900, 1.3950, 1.4000
Support: 1.3850, 1.3800, 1.3750
AUD/USD
The Aussie at 0.7345 price is almost stable. There is a support line near 0.7325 from where a bounce looks possible but the Aussie shows bearish signals.
FORECAST: SELL
Resistance: 0.7400, 0.7450, 0.7500,
Support: 0.7300, 0.7250, 0.7200
USD/JPY
The decline in yields tightened the spread between U.S. Government bonds and Japanese Government bonds, making the US Dollar a less-attractive asset.
FORECAST: SELL
Resistance: 110.00, 110.50, 111.00
Support: 109.50, 109.00, 108.50
USD/CAD
The USDCAD pair steps back from intraday high, stays mildly bid. A Strong RSI, sustained trading beyond one-month-old rising support line keeps buyers optimistic. Bears must breach six-week-old support, a three-week-long horizontal line adds to the upside filters.
FORECAST: BUY
Resistance: 1.2600, 1.2650, 1.2700
Support: 1.2550, 1.2500, 1.2450
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