EUR/USD: EU GDP is expected to increase in the second quarter
During the Asian session, the EUR/USD pair shows multidirectional movements, remaining near the 1.0990 level. Trading takes place in conditions of low activity, as investors refrain from opening new positions before the release of important macroeconomic statistics.
Analysts predict that in the second quarter, EU gross domestic product (GDP) growth will remain at 0.3%, which should lead to an increase in the annual rate from 0.4% to 0.6%. In Spain, the consumer price index for July fell from 3.4% to 2.8%, which corresponds to the general trend towards slowing inflation in the region and supports the current position of the European Central Bank (ECB) on monetary policy. Earlier, the market's attention was focused on data on business sentiment in the eurozone and Germany from the Center for European Economic Research (ZEW). These data turned out to be weaker than expected: the index for the eurozone fell from 43.7 to 17.9 points, and for Germany — from 41.8 to 19.2 points, which is significantly lower than forecasts.
Meanwhile, the US dollar is showing a correction, being at the level of 102.40 in the USDX index. The July producer price index showed an increase of only 0.1%, which is below market expectations, and led to a decrease in the annual rate from 2.7% to 2.2%. The base indicator remained unchanged for the month, but decreased from 3.0% to 2.4% in annual terms, indicating a decrease in the industry's ability to maintain price levels.
- Resistance levels: 1.1010, 1.1110.
- Support levels: 1.0970, 1.0880.
GBP/USD: annual inflation in Britain fell to 3.3% in July
The GBP/USD pair is showing instability, fluctuating around the level of 1.2830. Traders' attention is focused on the latest inflation statistics from the UK for July.
The annual core consumer price index fell from 3.5% to 3.3%, despite expectations of 3.4%, while the broader index increased from 2.0% to 2.2%, with a forecast of 2.3%. The monthly value of the indicator fell by 0.2% after the previous 0.1% increase. Meanwhile, the UK labour market is also showing signs of slowing down: annual earnings growth is slowing and the number of vacancies has been declining for 25 months in a row. This reduces the likelihood that the Bank of England will continue to aggressively raise interest rates. Catherine Mann, a member of the Monetary Policy Committee of the Bank of England, expressed concerns about a possible return of inflation to high levels, despite the fact that in June inflation was kept in the target range of 2.0-3.0%. Recall that Mann was one of those who voted to keep the rate at 5.25%, not supporting the majority's decision to reduce it to 5.00% for the first time since the beginning of the COVID-19 pandemic.
On the same day, investors also expect inflation data from the United States. The core consumer price index excluding food and energy is projected to decrease from 3.3% to 3.2% in annual terms and rise from 0.1% to 0.2% on a monthly basis. The broader index is expected to fall from 3.0% to 2.9%, but with an increase of 0.2% after the previous decrease of 0.1%. It is important to note that the core producer price index in the United States fell from 3.0% to 2.4% in July, exceeding analysts' expectations.
- Resistance levels: 1.2860, 1.2900, 1.2948, 1.3000.
- Support levels: 1.2817, 1.2776, 1.2730, 1.2700.
Gold market analysis
Gold is showing a slight decline, moving away from the recent local highs reached on August 2. Currently, the instrument is testing the 2460.00 level, trying to break it down while market participants are waiting for new factors that can affect the price movement.
In addition, gold quotes are supported against the background of increasing geopolitical tensions. There have been reports in the media about a possible Iranian military operation against Israel, which could begin as early as this week. Official Tehran has threatened retaliatory measures for the death of the leader of the political wing of Hamas, Ismail Haniyeh. The alleged attack could negate all cease-fire efforts in the Gaza Strip and significantly expand the scale of the conflict in the Middle East.
There is also an uptrend in the market. According to the latest report of the U.S. Commodity Futures Trading Commission (CFTC), last week the number of net speculative positions in gold decreased from 246.6 thousand to 238.7 thousand. Recently, market participants have been actively closing positions in anticipation of a possible correction: the balance of the bulls amounted to 203.726 thousand positions against 18.252 thousand for the bears. Last week, buyers closed 7,882 thousand contracts, while sellers reduced their positions by 4,447 thousand, indicating continuing concerns about further growth.
- Resistance levels: 2470.00, 2483.64, 2497.67, 2510.00.
- Support levels: 2450.00, 2431.44, 2415.00, 2400.00.
Crude Oil market analysis
During the Asian session, Brent Crude Oil prices are recovering from yesterday's decline, which did not allow quotes to gain a foothold at new highs reached on July 23. The instrument is currently testing the 80.70 level.
Today at 16:30 (GMT+2), the report of the Energy Information Administration of the U.S. Department of Energy (EIA) on the dynamics of oil reserves for the week ended August 9 is expected to be published. Analysts' forecasts indicate a possible decrease in inventories by 2 million barrels, after a decrease of 3.728 million barrels last week. In addition, market participants are analyzing the updated forecasts of the International Energy Agency (IEA). IEA experts have revised their expectations for an increase in global hydrocarbon production in 2024, lowering them by 40 thousand. barrels per day to a total of 102.93 million barrels per day. In 2025, production is expected to increase to 104.88 million barrels per day, while demand in 2024 is projected at 970 thousand barrels per day, which will lead to a total consumption of 103.06 million barrels per day. Among the factors constraining demand growth, the slow recovery of the Chinese economy and the possible weakening of industrial production in the EU countries are mentioned. It is also noted that in the second quarter, fuel demand outside the OECD countries was the lowest since 2020.
- Resistance levels: 81.00, 82.00, 82.40, 83.14.
- Support levels: 80.00, 79.00, 77.86, 77.00.