GERMAN, US DATA HEADLINE SLOW START TO THE WEEK
The final week of June begins on a lighter note Monday with only three potentially market-moving events scheduled for release. However, the releases will still provide important clues into the health of the US and German economies, the world’s first and fourth largest, respectively.
The European session will see its first and only economic data release at 08:00 GMT when the CESifo Group releases the monthly report on German business confidence. The IFO report contains three separate indicators tracked by the investment community: Expectations, Business Climate and Current Assessment. At the time of writing, analysts had reached a consensus about the Business Climate Index falling slightly to 101.7 in June compared with 102.2 the previous month.
Shifting gears to North America, the Federal Reserve Bank of Chicago will release the National Activity Index at 12:30 GMT. The May index is expected to dip to 0.09 from 0.34 the month before. Any reading above zero signifies expanding economic activity.
The Department of Commerce will issue its latest reading of new home sales at 14:00 GMT. The sale of new homes is projected to rise 3.3% in May to a seasonally adjusted 666,000.
At 14:30 GMT, the Dallas Federal Reserve Bank will release the June version of its manufacturing business index, which monitors conditions at both state and regional levels. The June index is projected to fall to 18.2 from 26.8 in May.
Europe’s common currency is in recovery mode after prices plunged to their lowest levels in two weeks. EUR/USD is currently trading at 1.1655, having rebounded roughly 130 pips from last Thursday’s swing low. Bullish sentiment appears to be gradually returning for the common currency, with analysts eyeing a potential return to the 1.1700 level as early as this week.
Like the euro, pound sterling is also in recovery mode after prices bottomed at their lowest levels of the year on Thursday. Cable is currently trading around 1.3260, having recovered 150 pips from the most recent swing low. GBP/USD faces immediate resistance at 1.3300. Above that level, the bulls will be eyeing 1.3315, which is the high from 22 June. On the opposite side of the ledger, the year-to-date swing low of 1.3101 offers immediate support.
The dollar-yen exchange rate started the week in negative territory Monday. After briefly crossing the psychologically important 110.00 level, prices reversed all the way back down to the mid-109.00 region. At present, USD/JPY is trading at 109.48. The decline pulled USD/JPY below its initial support zone of 109.55, leaving 109.20 exposed. On the opposite side of the ledger, immediate resistance is located at 110.15, followed by 110.45.