The EUR/USD pair consolidates around the 1.1400 figure, as despite a better market mood, the common currency saw its advance limited by local macroeconomic data. German’s preliminary Q2 GDP was un 0.5%, beating expectations of a 0.4% advance, although the YoY figure showed that the economy grew by less-than-expected, up 2.3% against the expected 2.5% advance. Inflation in the was up 0.3% MoM in July and by 2.0% when compared to a year earlier as expected. The Union’s GDP for the same period was better-than-expected, up 0.4% from the previous and the expected 0.3%, but Industrial Production posted a larger-than-expected slump, down in June 0.7%. Finally, the ZEW survey showed that economic sentiment improved in August, although the indicators remain in negative territory and well below average. For Germany, Economic Sentiment resulted at -13.7, improving from the previous -23.7, while for the whole EU, it printed -11.1 vs. the previous -18.7.
The US released Export and Import prices for July, down monthly basis but sharply up when compared to a year earlier, having no effect on majors. In the meantime, European equities lost their early Momentum, and struggle to remain afloat, although US indexes are up ahead of the opening.
The pair hit a daily high of 1.1429 before retreating, now gaining downward traction ahead of the US opening, with scope to break to fresh yearly lows according to technical readings in the 4 hours chart, as the early advance stalled slightly below a bearish 20 SMA, while extreme oversold readings have already been corrected, with technical indicators gaining downward traction in negative territory. The dollar is up when equities are down amid risk aversion, also up when equities recover ground on positive local data. King dollar is overstretched and yet, there are no solid reasons for a change in the dominant trend.
