GERMAN, US DATA HEADLINE QUIET RELEASE SCHEDULE ON MONDAY
Currency traders will be monitoring economic data from both sides of the Atlantic on Monday, with German and US reports set to generate the bulk of the headlines. In monetary policy, the fallout from the annual Jackson Hole Symposium is also on the agenda as traders prepare for multiple US interest rate hikes in the final four months of the year.
Action begins at 08:00 GMT with a report on German business confidence courtesy of the IFO Group. Germany’s business climate index is forecast to rise to 102.0 in August from 101.7 the previous month. The current assessment indicator is forecast to edge up 0.2 points to 105.5. Meanwhile, the expectations gauge likely rose to 98.5 in August from 98.2 the month before.
Shifting gears to North America, the Chicago Federal Reserve Bank will release its monthly gauge of business activity. The Chicago Fed National Activity Index (CFNAI) is forecast to fall to 0.14 in July from 0.43 the month before.
The Dallas Federal Reserve Bank will release the regional manufacturing business index at 14:30 GMT. The monthly indicator is forecast to strengthen to 36.9 in August from 32.3 in July.
Economic data will remain in the headlines all week long, with the US Commerce Department scheduled to report on personal incomes and outlays, personal consumption expenditures and weekly jobless claims. Preliminary inflation figures for Germany and the broader Eurozone will also be released.
Europe’s common currency began its long road to recovery last week as the US dollar backtracked against a basket of its peers. The EUR/USD exchange rate jumped 0.7% on Friday to trade at 1.1626, the highest in more than two weeks. In terms of technical indicators, the pair faces immediate resistance at 1.1660, followed by 1.1700 and 1.1745. On the opposite side of the ledger, support is located at 1.1585, 1.1545 and 1.1500.
Cable traded as high as 1.2929 last week before profit-takers drove prices back down toward the mid-1.2800 region. From a technical standpoint, the GBP/USD exchange rate faces immediate resistance at the psychological 1.2900 level. Above that point, last week’s high is likely to limit gains. On the flipside, immediate support is located at 1.2800 followed by 1.12770.
The Aussie bounced back sharply at the end of last week and looks poised to continue higher following the ousting of Australian Prime Minister Malcolm Turnbull. The AUD/USD exchange rate currently sits at 0.7335, with the bulls eyeing 0.7355 as the next target. On the opposite side of the ledger, immediate support is located at 0.7300.