EURUSD – Up
Event to watch out for today:
15:30 GMT+3. USD – GDP volume change
EURUSD:
The Euro-dollar pair pulled back to the 1.0680 area on Wednesday after the German GfK Consumer Confidence Index for July unexpectedly declined, while a lack of meaningful data during the U.S. trading session left investors chewing over the Federal Reserve’s (Fed) cautious stance this week. Germany’s consumer confidence reading for July fell to -21.8, falling short of forecasts for a recovery to -18.9 from the previous month’s revised reading of -21.0. Despite a slow and steady recovery in the German GfK consumer confidence survey, Wednesday’s downbeat publication knocked the legs out from under an already battered euro.
The change in U.S. new home sales in May recorded a -11.3% month-over-month decline on Wednesday (2.0%), sharply revised from the initial reading of -4.7%. U.S. GDP for the quarter is expected to rise slightly to 1.4% from an initial reading of 1.3%, while May durable goods orders are expected to contract by -0.1% from a revised 0.6% in the prior month. U.S. initial jobless claims for the week ending June 21 are expected to fall slightly to 236k from the previous reading of 238k, but the figure is expected to be above the four-week average of 232.75k.
Market confidence that the Federal Open Market Committee (FOMC) will cut rates on September 18 has declined. The probability of a rate cut of at least a quarter point fell to 60%, down from a peak of just above 70% last week, according to CME’s FedWatch tool.
Trading recommendation: Trade predominantly with Buy orders from the current price level.
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