ECONOMIC DATA IN FOCUS ON WEDNESDAY
Headline data releases from Europe and the United States will preoccupy currency traders on Wednesday ahead of an active second half of the week that includes US GDP and a European Central Bank policy decision.
Action on Wednesday begins with a report on German business sentiment courtesy of the CESifo Group. At 08:00 GMT, the organization will release three indicators on German business sentiment, including: business climate, current assessment, and expectations. All three readings are expected to fall for July.
The Centre for European Economic Research (ZEW) will issue a report on Swiss business conditions at 08:00 GMT. The expectations index provides a snapshot of underlying business conditions in the Swiss economy.
Elsewhere in Europe, the British Bankers Association (BBA) will report on mortgage approvals at 08:30 GMT. Approvals are projected to decline to 39,000 for June compared with 39,244 the month before.
Housing data will headline North American trading beginning at 11:00 GMT with a report on US mortgage applications courtesy of the Mortgage Bankers Association (MBA). Later in the morning, the Department of Commerce will issue its monthly report on new home sales, which account for roughly a tenth of the US housing market.
The sale of new homes is projected to fall 2.8% in June to a seasonally adjusted annual rate of 670,000. Sales rose 6.7% the month before.
Commodity traders will also be keeping track of crude inventory data courtesy of the US Energy Information Administration (EIA). Stockpiles are projected to fall by nearly 3.2 million barrels in the week ended 16 July after surging by more than 5.8 million barrels the week before.
Europe’s common currency traded choppy on Tuesday, with prices fluctuating between 1.1660 and 1.1708. At the time of writing, EUR/USD was trading at 1.1687, where it was little changed compared with the previous close. Support levels are seen at 1.1650/60 ahead of the European Central Bank’s policy decision, which is scheduled on Thursday.
Cable stabilized on Tuesday after hitting an intraday low of 1.3076. GBP/USD now trades at 1.3148, where it was little changed. The bulls are eyeing 1.3200 as the next resistance level. On the opposite side of the spectrum, immediate support is located in the vicinity of 1.3110, followed by 1.3070.
The North American pair’s recovery attempt fell short on Tuesday, as prices retraced back down to the mid-1.3100 region after hitting a high north of 1.3190. USD/CAD currently sits at 1.3147, where it is virtually unchanged compared with the previous close. The pair faces a strong support level in the low 1.3100 region, which corresponds to the double-bottom formed on 20 July. Immediate resistance is located at Tuesday’s interim high.