US ECONOMIC DATA DOMINATES FRIDAY SESSION

After a quiet week, the US economic calendar heats up on Friday with a deluge of market-moving reports. Currency traders can therefore expect active moves in the US dollar and in its accompanying pairs.

Ahead of the New York session, traders can expect headline trade data from the Eurozone. The European Commission’s statistical agency will report its May trade balance at 09:00 GMT. The euro area trade surplus is forecast to expand to €20.3 billion in May from €19.6 billion the month before.

The US data wire begins at 12:30 GMT with a report on retail sales, which is widely used to gauge consumer spending in the economy. Receipts at retail stores are forecast to rise 0.1% in June, following a 0.3% drop the previous month.

At the same time, the Labor Department will issue its monthly consumer price index (CPI) for June. Consumer inflation is forecast to rise 1.7% annually, down from 1.9% the previous month. So-called core inflation, which strips away volatile goods such as food and energy, is also expected to rise 1.7%.

At 13:15 GMT, the Federal Reserve will report on industrial production, a broad measure of factory output that measures activity at mines, utilities and manufacturing companies. Industrial production is forecast to rise 0.3% in June following no change the previous month. The capacity utilization is expected to deviate very little from the previous month.

Later in the session, the University of Michigan will release its closely-watched consumer sentiment index for July. The reading is expected to deviate very little from June.

Meanwhile, the Commerce Department will report on business inventories at 14:00 GMT.

The US dollar index (DXY) was little changed on Thursday. Traders can expect a flurry of activity for dollar pairs in the coming hours.

In commodities, silver prices are struggling to overcome bearish pressure as the market for precious metals remains subdued. The grey metal suffered a massive flash crash last Friday, where it lost 11% in the span of minutes.

EURUSD

After climbing to fresh yearly highs, the euro’s gains have slowed significantly this week. The EUR/USD exchange rate was trading slightly above 1.1400 ahead of European trade. The pair is likely to run into firm resistance in the mid-1.14 region.

GBPUSD

Cable rebounded on Thursday, but remains well below the psychological 1.30 handle. The GBP/USD exchange rate is hovering in the mid-1.29 region and a hawkish Bank of England (BOE) is expected to keep the pair trending in positive direction for the short term.  

Silver

Silver prices have rebounded from yearly lows, but remain in a firm downtrend. Underlying weakness in silver reflects bearish pressure in the precious metal market. The grey metal has support at $15.43, the settlement low of 13 July.