Dollar Resurges after Strong GDP Data, Euro Weakens Post ECB Rate Hike
| Action Insight Mid-Day Report 7-27-23 |
Dollar Resurges after Strong GDP Data, Euro Weakens Post ECB Rate Hike |
Euro turns weaker after ECB's expected rate hike. Downside momentum is also picking up when ECB President Christine Lagarde indicated that even minor alterations in the statement's phrasing were intentional. ECB has shifted its wording from interest rates "will be brought to" to will be "set" at a sufficiently restrictive level, providing a basis to that it's now restrictive enough for a pause. Meanwhile, Dollar is making a robust comeback, triggered by stronger than expected GDP data, among other positive economic indicators. Despite being the second weakest currency for the week so far, sharing the spot with Euro, the greenback now appears to have a chance to alter its positive given the current momentum. However, the eventual picture for the week remains uncertain given that Yen might have some moves, as BoJ gears up for its policy announcement tomorrow. Meanwhile, it's starting to look hard for commodity currencies to maintain earlier gains. On the technical front, Gold experienced a downturn with the Dollar's resurgence, having failed to surpass the 1987.22 resistance mark. The consolidation from 1987.22 is extending with another drop. However, prospects for a further rise are still viable as long as the 1945.57 support level holds. Nevertheless, a firm break below 1945.57 could indicate the completion of the overall rebound from 1892.76 and may serve as a confirmation signal for an extended rally in the greenback. In Europe, at the time of writing, FTSE is up 0.36%. DAX is up 1.36%. CAC is up 1.89%. Germany 10-year yield is down -0.047 at 2.439. Earlier in Asia, Nikkei rose 0.68%. Hong Kong HSI rose 1.41%. China Shanghai SSE dropped -0.20%. Singapore Strait Times rose 0.98%. Japan 10-year JGB yield dropped -0.0071 to 0.441. |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.1047; (P) 1.1077; (R1) 1.1115; More... EUR/USD falls sharply after rejection by 1.1146 resistance and immediate focus is now on 1.1011 resistance turned support. Decisive break there will argue that larger correction is underway. Deeper fall would then be seen to 1.0832 support next. Nevertheless, rebound from current level, followed by firm break of 1.1146, will bring retest of 1.1274 high instead. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
|---|
| 01:30 | AUD | Import Price Index Q/Q Q2 | -0.80% | -0.80% | -4.20% | | 06:00 | EUR | Germany Gfk Consumer Confidence Aug | -24.4 | -24.7 | -25.4 | -25.2 | | 12:15 | EUR | ECB Main Refinancing Rate | 4.25% | 4.25% | 4.00% | | 12:15 | EUR | ECB Rate On Deposit Facility | 3.75% | 3.75% | 3.50% | | 12:30 | USD | Initial Jobless Claims (Jul 21) | 221K | 233K | 228K | | 12:30 | USD | GDP Annualized Q2 P | 2.40% | 1.60% | 2.00% | | 12:30 | USD | GDP Price Index Q2 P | 2.60% | 3.10% | 4.10% | | 12:30 | USD | Goods Trade Balance (USD) Jun P | -87.8B | -91.8B | -91.1B | -91.9B | | 12:30 | USD | Wholesale Inventories Jun P | -0.30% | -0.10% | 0.00% | | 12:30 | USD | Durable Goods Orders Jun | 4.70% | 1.00% | 1.80% | | 12:30 | USD | Durable Goods Orders ex Transportation Jun | 0.60% | 0.10% | 0.70% | | 12:45 | EUR | ECB Press Conference | | 14:00 | USD | Pending Home Sales M/M Jun | -0.50% | -2.70% | | 14:30 | USD | Natural Gas Storage | 12B | 41B |
|
|
|
