The euro little changed against the dollar, trading at near nine-month low, as the latest euro zone economic data keeps pressing the pair while the market expects a series of the United States reports.
The market did not react to the negative Germany's GDP. It dropped by 0.2% compared with the previous period in the second quarter of 2014, instead of the expected 0.1%. Although annualized GDP grew by 0.8%, the experts expected a growth of 1.5%.
We advise to long with the first target 1.3449. In the case of overcoming this target longs will be relevant to 1.3420. The second target is 1.3460.
The UK economy continued to grow steadily in terms of economic data and fundamental analysis, therefore it is likely that the current decline is a part of the correction, after which a long-term upward movement may be continued.
The pound fell to another multi-month low 1.6656, as it remains under pressure less "hawkish" the Bank of England’s comments, published on Wednesday. The cable tried to recover to 1.6695, due to the weakness of the American dollar after the United States Initial Jobless Claims release.
Please be advised to sell to 1.6607. After overcoming this target, the new one will be the level of 1.6428.
The Japanese currency is back against most currencies amid the crisis speculation in Ukraine and in the Middle East, which reduced demand for safe assets. The pair is directed downwards now though the yen grew in price last week as the market saw it as safe harbor currency.
The recent sales tax growth in Japan may slow down the country economy growth. The recent GDP figures of the second quarter just prove this. The negative yen dynamics coincided with the machinery orders release for June, the orders grew by only 8.8%, while they were expected to grow by 15.3% after falling 19.5% the previous month. In annual terms, the indicator fell by 3%.
We believe the pair will be correcting this week. The main target is the level 101.80. If the pair decides to grow it will go to the level of 103 as the first target.