EUROZONE DATA RELEASES HEADLINE SLOW START TO THE WEEK
A pair of Eurozone data releases headline an otherwise slow session for the economic calendar ahead of a more active release schedule later in the week. Nevertheless, concerns over trade and economic growth will continue to fuel currency traders.
Action in Europe begins at 06:00 GMT with a report on German factory orders. The monthly release is expected to show a decline of 0.2% in June, based on a median estimate of economists. Factory orders surged 2.6% in May and 4.4% annually.
Later in the session, Sentix will release its Eurozone investor confidence index for August. The monthly gauge provides an outlook in investor sentiment based on a total of 36 indicators.
There are no other major releases scheduled for Monday. Later in the week, the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) will deliver their latest verdict on interest rates. No change in monetary policy is expected on either front.
In terms of upcoming data releases, reports on German trade, UK GDP and Chinese inflation will headline the economic calendar for the remainder of the week.
Investors can expect an active session for the US dollar on Monday following the release of July nonfarm payrolls. On Friday, the Department of Labor said jobless claims rose by 157,000 last month. While much less than expected, other readings of labor market health showed steady progress for the world’s largest economy. In particular, the jobless rate dipped to 3.9% from 4%. Average hourly earnings, which are a gauge of wage inflation, rose 2.7% year-over-year.
Europe’s common currency entered oversold conditions last week, prompting some short-covering ahead of US nonfarm payrolls. That being said, EUR/USD returned below 1.1600 on Friday and is currently trading near its lowest levels of the year. The pair sat at 1.1568 at the start of Asian trade, with immediate support located at 1.1555. Resistance is likely found at 1.1615.
The Australian dollar regained its poise on Friday, as prices clawed back above 0.7400 US. The AUD/USD exchange rate was trading as low as 0.7352 on Friday prior to the recovery. In terms of technical levels, the pair is testing the immediate resistance of 0.7400. Above that level, the bulls are eyeing 0.7445. On the opposite side of the spectrum, the pair faces immediate support at 0.7330.
Cable is coming off a tepid Friday session where prices fell below 1.3000 US for the first time in two weeks. The GBP/USD exchange rate recovered at 1.3000, although considerable downside risks remain. From a technical point of view, the pair faces immediate support at 1.2970, followed by 1.2925. On the flipside, immediate resistance is located at 1.3045, followed by 1.3085.