The Eur/Usd pair remained in a very short range in the Asian and European sessions on Tuesday where it failed to break the resistance level of 1.3316 even after the German ZEW Economic Sentiment showed some improvement against the previously recorded reading of last month.
However, the core retail sales in the United States grew by 0.5% in the month of July against its previously recorded figure of 0.1% growth in June, hence resulting the U.S dollar to gain against the euro which took the pair 50 points down and tested the support level of 1.3238.
Currently the pair is trading at 1.3263 at the start of the Asian session on Wednesday where it must make a sustainable move above yesterday’s high of 1.3316 in order to move ahead till 1.3332 and 1.3352. But if it remains below 1.3302, then sellers would be confident to ride the market where breaking of yesterday’s support of 1.3235 can bring the euro further down till 1.3219 and 1.3200.
The German Prelim GDP and the Eurozone Flash GDP is due today in the European session.
Stagnant Inflation kept Pound Directionless
The inflation numbers showed a bit of disappointment where the rate fell from 2.9% to 2.8%, despite the efforts from the side of the BoE to boost it up. Now that it is sluggish, this may compel the monetary policy makers to re-think over increasing their bond purchases facility to increase the money supply and inflation in the economy.
Gbp/Usd remained in a wider range on Tuesday as it failed to sustain above the 1.5496 resistance level and also couldn’t fall below its support level of 1.5428. Apparently it is more vulnerable now and may plunge more today if the Asset purchase facility and Claimount Count Change data disappoints the investors.
Currently it is hovering at 1.5453 level where a move above 1.5464 could take it to test the 1.5519 resistance level, followed by 1.5519. Whereas, a move below 1.5426 would open the doors for the pair to test its cluster of support levels at 1.5403 and 1.5379, below which selling would become dynamic.
Yen Pairs Retrace Smoothly
Yen pairs including Eur/Jpy and Usd/Jpy gave a healthy and smooth bullish correction of 61.8% Fibonacci retracement level where both pairs gained nearly 100 points yesterday. The overall trend is still bearish where this bullish correction gave in response to the heavy 400 points fall in the past weeks, as the Japanese economy is facing some curtains where its national debt has also surpassed 1 quadrillion Yen.
Currently both pairs are trading at their resistance levels where selling opportunity might fade away if these pairs manage to move above and sustain their yesterday’s high of 130.45 and 98.35 respectively. However, a chance can be taken to sell these pairs at this level with a tight stop loss.
To contact the reporter of this story: Jonathan Millet at email@example.com