THE EUR/USD IS CONSOLIDATING AFTER RECENT VOLATILITY
The market has shown low volatility level after confident growth of the US dollar on the background of positive news from the labor market. The unemployment rate in the US fell by 0.1% to 4.3% and non-farm payrolls increased by 209.000 in July against the expected 182.000. These statistics slightly increased the probability of another rate hike by the Fed before the end of the year. Investors may keep fixing positions after a strong rally during the previous weeks.
Additional pressure on EUR/USD quotes came from Germany where the industrial production level in June declined by 1.1% against predicted growth of 0.2%. The Sentix investor confidence index also declined to 27.7 in August which is 0.6 less than in July.
The British pound is losing positions amid speculations about negotiations on the Brexit terms that may last until 2022. Lack of significant progress in the talks on this key issue will put pressure on the pound that is currently influenced by the slowing pace of GDP growth in the UK. The stronger than expected data from the Halifax house price index in the UK for July which showed an increase by 0.4% after declining by 0.9% in June was not able to change the market mood regarding the sterling.
The USD/JPY is consolidating after an increase on Friday and ahead of the report on the current account balance at 23:50 GMT. Considering the growth of the US dollar the resumption of a fall for the guppy is less likely in the coming days.
The common currency quotes corrected upwards after a strong decline at the end of the previous week. In case of a further increase and overcoming the 1.1800 mark, we are likely to see growth up to 1.1900. On the other hand, recent price fixing below 1.1800 may be a strong sell signal with the stop above 1.1900 and potential targets at 1.1700 and 1.1620.
The GBP/USD price is moving below the angled resistance line. Recently the price was consolidating near the important 1.3050 level and afterwards resumed dropping. On one hand, it may be judged a signal for a further decline to 1.2950 and lower but the RSI on the15-minute chart points to a possible rising correction in the coming hours.
The USD/JPY is consolidating near 110.70. In case of overcoming the resistance at 111.00 on the 15-minute chart, we may see the double bottom formation that is a reversal pattern. In this case, the immediate objectives will be placed at 113.00 and 114.70. The decline is likely to be limited by support at 110.00.