US dollar rises for a sixth straight day

The euro declined against the US dollar as traders reacted to mixed economic data from Europe. In Germany, data from the Bureau of Statistics showed that the country’s exports rose by 4.7% in July, down from the previous 14.9%. Imports rose by 1.1% after rising by 7.0% in the previous month. The two numbers were lower than the 5.0% and 3.3% increase that analysts were expecting. Meanwhile, data released by Eurostat showed that the bloc’s economy contracted by 11.8% in the second quarter, leading to an annualised decline of 14.7%. This decline was worse than the Chinese growth of 3.2% but it was better than the US contraction of more than 32%.

The Japanese yen fell against the dollar as the market reacted to the Japanese GDP and overtime pay data. According to the Ministry of Finance, the Japanese economy contracted by 7.9% in the second quarter leading to an annualised decline of 28.1%. This decline means that the country’s economy has been in the red for the past three consecutive quarters. The current revision was worse than the previous one because of new data regarding fixed asset investments. The data showed that capital expenditure fell by 4.7% in the quarter as companies moved into capital preservation mode. Household spending and external demand fell by 7.6% and 3.0% respectively. 

The US dollar rose against key peers as traders reacted to the rising tensions between the United States and China. In an interview yesterday, Donald Trump said that he would consider decoupling from China if he is elected. That would be a tough thing considering that the two countries do trade worth more than $600 billion every year. Also, it would hurt many American firms that have a substantial market share in China. The interview came a few days after the US said it was considering putting the biggest Chinese chipmaker in the so-called Entity List.

EUR/USD

The EUR/USD pair dropped to an intraday low of 1781 as traders reacted to economic data from Europe. Interestingly, on the four-hour chart, the pair has managed to move below the important support that is shown in white. This is a signal that bears have prevailed. The price is also below the 50-day and 100-day exponential moving averages. The RSI is also moving to the overbought level of 30. Therefore, the price is likely to continue falling as bears target the next support at 1.1750.

GBP/USD

The GBP/USD pair dropped to an intraday low of 1.3033. On the four-hour chart, the price moved below the ascending yellow trendline. It has also moved below the 50-day and 100-day exponential moving averages. The signal and main lines of the MACD have moved lower. The same is true with the money flow index, which has moved closer to the oversold level. Therefore, the pair is likely to continue falling to 1.2900.

XBR/USD

The XBR/USD pair declined to an intraday low of 40.95. On the daily chart, the price has moved below the 38.2% Fibonacci retracement level. It is also below the lower line of the 50-day and 100-day moving averages and below the rising wedge pattern. Therefore, the pair is likely to continue falling as bears attempt to test the next psychological level of 40.00.