By Russell Glaser – Yesterday’s trading was influnced by the release of disappointing Japanese Q2 GDP data, highlighting concerns of a choppy global economic recovery. More significant data is due out today both from the U.S. and Europe that will set the tone for risk taking in the forex markets.
GBP – CPI y/y – 08:30 GMT
Expectations: 3.1%. Previous: 3.2%.
Worries of stagflation are rising in Britain (a combination of slow economic growth and rising inflation). Tomorrow’s data release will be a telling sign if this situation is indeed forming. Resistance for the GBP/USD is found at 1.5710.
EUR – German ZEW Economic Sentiment– 09:00
Expectations: 10.6. Previous: 10.7.
Last week Europe’s largest economy surprised the market with better than expected GDP data, helping to send the euro higher. Today’s data release could have the same affect. Support and resistance for the EUR/USD come in at last night’s low of 1.2730 followed by the mid July high of 1.3030.
USD – Building Permits m/m – 12:30 GMT
Expectations: 0.58M. Previous 0.58M
Key housing data from the U.S. Recent housing economic releases from the States have disappointed. This should be no exception. A negative release has the potential to strengthen the dollar.
USD – PPI m/m – 12:30 GMT
Expectations: 0.2%. Previous: -0.5%.
The U.S. may be headed for deflation, or already in a deflationary state. Disappointing PPI numbers may strengthen the USD against the majors.
Forex Market Analysis provided by ForexYard.
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