MARKET WAITS FOR THE FOMC MEETING MINUTES RELEASE
Today the central event will be the release of the previous FOMC meeting minutes at 18:00 GMT. If we get hawkish rhetoric from FOMC members, the EUR/USD fall may accelerate. The spotlight will be mostly turned to their assessment of inflation in the US and that will have a major influence on any interest rate hike decisions.
The preliminary report on GDP for the Eurozone in the second quarter that showed 0.6% growth had little impact on the course of trading. Some support for the EUR/USD came from the US where key housing statistics were published today according to which building permits in July declined to 1.22 million against 1.25 million forecasted and housing starts for the same period reduced to 1.16 million compared to 1.21 million in June.
The bulls tried to change the trend of the GBP/USD price after strong labour market data was published in the UK. Unemployment fell to 4.4%, its lowest level since 1975 and the average earning index increased to 2.1%, which is by 0.2% more than expected.
The USD/JPY price keeps rising on the background of a stronger US dollar and easing tensions connected to the threat from North Korea. The yen is traditionally considered a safe haven asset which is usually used by investors during periods of geopolitical turmoil. A rise in volatility for the pair is possible following the publication of the FOMC meeting minutes at 18:00 and from the trade balance data in Japan released at 23:50 GMT.
The EUR/USD price reached support at 1.1700 and fixing below it may be a trigger for the fall to continue with potential targets at 1.1620 and 1.1500. We are likely to see increased volatility tonight and in case of an upward correction the closest targets will be 1.1750 and 1.1800.
After an unsuccessful attempt to gain a foothold above 1.2880 and to resume growth, the GBP/USD price returned to the narrow range which it was previously consolidating within. In order to change the trend to positive with the potential of reaching 1.3050 and 1.3250, the quotes need to fix above 1.2950. However, we are more likely to see a further fall to 1.2800 in the nearest future.
The confident increase of the USD/JPY has seen the price approach key resistance at 111.00, the overcoming of which may open the way for increases up to 111.70, 113.00 and 114.70. After considerable appreciation we do not rule out the price rollback within the correction to 110.30 and 109.60 and the stimulus for such a move may be crossing the SMA100 on the 15-minute chart.