Fundamental Market Report – USD inspired by mixed US data July 13, 2017

EUR/USD can sellers take full control?

Price dropped significantly in the last hours as the USD received little support from the United States economy. The greenback needed a bullish spark to be able to increase again versus its major rivals, the USDX looks motivated to increase after the mixed US numbers and after the Yellen’s testimony. The EUR/USD maintains a bullish perspective on the Daily chart as long as is trading somewhere above the 1.1350 psychological level and as long as the USDX stays below the 96.00 level.

USD received a helping hand from the US PPI, which increased by 0.1% in June, beating the 0.0% estimate and the 0.0% increase in May. The economic indicator stays in the positive territory for the third month in June, lifting the dollar. Unfortunately, the Unemployment Claims have dropped less than expected, from 250K to 247K in the previous week, the estimate was 245K jobs. However, is very important that the Jobless Claims indicator was trapped below the 250K level in the 11 – weeks, could remain there and could help the Federal Reserve to hike the Federal Funds Rate again in the upcoming months.

The greenback needs much more from the United States economy to be able to take the lead and to dominate the currency market, but looks like that we have a minor step in this direction.

GOLD – US Inflation and Retail Sales data on radar

The yellow metal has decreased again since the start of the European trading session and failed to stay above the $1220 per ounce. Is trading in the red and looks to heavy to be stopped on the short term, continues to be under massive selling pressure despite the minor rebound.

A USD increase will send the Gold much below the 1204 previous low, but this scenario will take shape only if the United States data will come better tomorrow. The US is to release high impact data, which will bring a high volatility, the CPI may increase by 0.1% in June, while the Core CPI by 0.2%, more versus the 0.1% in May .

The Retail Sales are expected to increase by 0.1% in the last month after the 0.3% drop in May, the Core Retail Sales could increase by 0.2% and could boost the USD. The Capacity Utilization Rate and the Industrial Production will come out as well, the greenback will appreciate versus all its rivals if the reports will come in line with expectations of better. The Gold could drop even below the $1200 if the economic figures will impress tomorrow.

By Olimpiu Tuns

Market Analyst

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