After closing in the bullish zone on Friday after NFP data was published, things got a bit worse for the euro as it remained sluggish all day long on Monday, but lost crucial 30 points in the U.S. session that could allow the bears to enter the market yet again if the pair does not move above 1.3291 on Tuesday.
Despite the better than expected performance in the services sector of Spain and Italy, the pair couldn’t get support of the bulls because the retail sales of the Eurozone contracted by 0.5% in July against its previous growth rate of 1.1% recorded in June.
Moreover, the non-manufacturing PMI of the U.S. was way better than expected for July as the services sector performed pretty well in July, hence giving the U.S. dollar a little bit of an edge against the euro.
Currently the pair is trading at 1.3258 in the Asian session, where a move above 1.3265 could take it to 1.3291, breaking of which could show 1.3325. However, sellers would feel safe to enter the market if the pair trades below 1.3265 level where its next support levels are 1.3239 and 1.3221.
Italian Prelim GDP and German Factory orders are the key European economic indicators to watch today.
U.K. Services sector Booms, Lifts Pound
The services sector of the U.K. economy grew with a reading of 60.2 against the expected figure of 57.4 in the month of July, hence giving sharp bullish support to the pair where the pound gained around 80 points on Monday against the U.S. dollar.
The bearish correction is still due however, and the pair would test 1.5398 and 1.5437 if it breaks the resistance level of 1.5377. While on the downwards side, if it breaks the support level of 1.52994 then it may go down further to test 1.5230. Sellers would feel confident to enter the market below 1.5195.
Aussie Bounces, Giving Sellers Another Opportunity
The Australian dollar made a bullish move on Monday where it gained around 85 points against the greenback even the retail sales in the Australian economy did not grow at all in July, against the 0.2% growth in June. However, it is still in the bearish zone and would remain bearish as long as it does not trade sustainably above 0.8975. Today the interest rate and trade balance data is due for the Aussie where heavy selling could be seen again if the data disappoints the traders.
To contact the reports of this story: Jonathan Millet at email@example.com