Euro under pressure as data shows more weakness in the region
US futures rose today after strong results from companies like Google, Intel, and Twitter. Alphabet stock rose by 8.6% in the premarket after the company announced renewed growth of its advertising business. Intel rose by 4.2% after the company announced better-than-expected results. It also confirmed that it sold its modem business to Apple. Twitter announced better results, which were driven by the growth in daily active users. On the negative side, Amazon declined by 1.3% after the company reported its first earnings miss in more than two years. Already, 75% of the 185 S&P 500 companies that have released their earnings have topped the consensus estimates.
In the United States, the country reported the first reading of the second quarter GDP data. The numbers showed that the economy expanded by 2.1% in the second quarter. While this was lower than the first quarter growth of 3.1%, it was higher than the consensus estimates of 1.8%. The GDP price index rose by 2.5% in the quarter, which was higher than the expected 1.9%. Further, the core PCE prices increased by 1.8%, which was higher than the previous 1.2%. The growth in the second quarter was mostly contributed to increased government spending.
The euro was relatively unmoved today after the interest rates decision by the European Central Bank that was released yesterday. Today, data from the region showed that the economy was continuing to weaken. In Germany, the Import Price Index declined by -1.4% in June. This was much lower than the consensus estimates of -0.8% and May’s -0.8%. On an annualized basis, the German import price index declined by -2.0%, which was lower than the expected decline of -1.5%.
The EUR/USD pair was relatively unchanged after the better-than-expected GDP data from the US. The pair is trading at 1.1135, which is slightly above yesterday’s low of 1.1100. On the hourly chart, the pair is trading below the 21-day and 14-day moving averages. The RSI is slightly above the oversold level. The pair is at an important support as shown below and could remain along this channel ahead of the Fed decision next week.
The GBP/USD pair continued declining as the market continued to keep an eye on Boris Johnson’s new administration. The pair is trading at 1.2415, which is slightly above the day’s low of 1.2410. On the hourly chart, this price is along the lower line of the Bollinger Bands and below the 21-day and 14-day moving averages. The RSI has moved to the oversold level of 30. The pair could continue moving lower in the American session.
The NZD/USD pair continued the downward trend that was started on Tuesday this week. The pair reached a low of 0.6633, which was the lowest level since July 11. On the hourly chart, the pair is trading below the 21-day and 42-day moving averages. The pair is along the lower line of the Bollinger Bands. It is below the oversold level of 30. The same is true with the Chaikin oscillator, which is trading below the oversold level.