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Market is Balanced: All Attention on American Statistics

Since the opening of the European session, the euro/dollar slid to 1.1329 and then returned to 1.1247. This was all as a result of movements on the German bonds and the statistics from Germany. The indices for economic sentiment and analysis of the current situation in Germany fell to 31.5 and 62.9 (forecasted 37.1 and 63.0), Eurozone sentiment index: 53.7 and 61.2 (forecasted: 60.3).

The pound/dollar fell from 1.5631 to 1.5540 on the back of data regarding UK inflation. The UK CPI met expectations and grew by 0.1% in comparison with the same period last year. Other inflation indicators and the index for housing prices disappointed traders. The base CPI didn’t meet expectations: 0.9% against a forecasted 1.0%. Retail prices grew by 0.2% MOM against a forecasted 0.3%.

The pound/dollar recovered from a session minimum of 1.5540 to 1.5577 due to a fall in the euro/pound cross. The current pound situation is reminiscent of the period from 26th May to 1st June this year. Back then the pound slid to the balance line and renewed its fall against the US dollar. Now the pound is losing everything, mirroring the dollar’s fall. The euro/dollar rate has also stopped on the balance line at 1.1242.

At 15:30 EET some data on new houses and housing construction permits in May for the US will be released.

If the data exceeds expectations, the dollar will continue to strengthen. If not, the pound/dollar and euro/dollar will return to their intraday maximums.

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