EURUSD – Up
EURUSD trading plan:
U.S. producer prices unexpectedly fell in July amid a drop in the cost for energy products and underlying producer inflation appears to be on a downward trend, while jobless claims rose for a second straight week in a labor market that remains tight. There was a drop of 1.8% in goods prices after a gain of 2.3% in June. A 16.7% fall in gasoline prices accounted for 80% of that decline. The prices of diesel fuel, liquefied petroleum gas and residential natural gas also fell sharply. However, food prices gained 1.0% after declining 0.2% in the prior month, while the cost of services edged up 0.1% after advancing 0.3% in June. Yields on 2-year Treasury notes, the U.S. government bond most sensitive to Fed policy expectations, edged lower, and CME Group’s FedWatch tool showed a modestly higher likelihood that the central bank will raise its policy rate by 50 basis points next month.
Investment idea: buy 1.0300 and take profit 1.0370.
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