It was another favorable week for the United States with the release of several forecast-beating economic data.
The US Census Bureau announced that the Durable Goods Orders increased 3.6 percent in May, led by demand for trucks and cars, while Core Durable Goods Orders inched up 0.7 percent.
The Standard & Poor’s/Case-Shiller Composite-20 House Price Index rose by most in the last seven years to 12.1 percent in April, beating the median forecast of 10.6 percent. The current reading is the eleventh straight monthly climb.
The Consumer Confidence report showed an advance to 81.4 in June, stronger than the 75.2 estimate. This was a huge jump from the previous revised reading of 74.3 (down from the initial reading of 76.2).
The US New Home Sales also increased in May to 476,000, beating its respective forecast for the second straight month. Sales have now been maintained in the 400,000 level for the fifth straight month.
The University of Michigan Consumer Sentiment capped the week with an 84.1 reading for June, keeping the sentiment index in the 80 level for the second month.
Meanwhile, the notable weak US data results came from Final GDP and Chicago PMI. Both came in weaker than expected at 1.8 percent and 51.6, respectively.
In other news, Statistics New Zealand reported a growth of NZD41 million in Overseas Merchandise Trade—the weakest gain in four months. Exports slid 7.8 percent, led by the 48 percent export decline of crude oil. Analysts were expecting an NZD412 million advance.
In Japan, Preliminary Industrial Production surprised with a 2 percent gain in May, a METI report showed last Friday. The fifth consecutive monthly gain came as a surprise since analysts were expecting a mere 0.2 percent advance after a substantial 1.7 percent growth in April. Retail Sales edged up 0.8 percent in April, following a -0.2 percent reading back in March and three more monthly declines. Housing starts jumped 14.5 percent.
Gold declined significantly for another week, sinking $121 this time ($122 last week). After moving down to $1,1180, price made a quick up burst during the final two hours on Friday, climbing $47 to create this week’s only positive daily close at $1,233—near the midpoint of this week’s decline. Bulls should consolidate their efforts for a very quick move toward $1,400 this coming week.
Oil moved opposite to Gold for the entire week. On Friday, the climb above the $97 level lost support, pulling price back to the $96s where it ended during the Friday close. Nevertheless, it was an up week for Oil and another test of $97-$99 could happen again in the subsequent days.
EURUSD made a follow-through decline this week after registering a 315-pip bearish engulfing candlestick in the previous week. The 1.3000 level is in very serious danger of getting blown out in the coming week. Bulls must fortify their defenses at the said level.
USDJPY made an impressive, albeit slow, recovery since June 17, printing positive closes in 8 of the last 10 trading days. The pair comfortably closed above 99 on Friday, and this sets up a possible march toward the 100-101 area in the coming weeks. Buyers must remain supportive of any price declines.
Except for Monday, GBPUSD bears trashed a lot of bulls throughout this week, sinking price through the 1.5200 level before closing the week slightly above this level. Based on the current price action, the pair is poised to make another attack on the 1.5000-1.5150 area. Buyers should vehemently oppose further declines in the new week.
The Week Ahead
The coming week is the start of a new month; hence it will be evenly lively with a slew of economic data releases.
Monday features the release of Japan’s Tankan data; China, Italy, Spain, and the UK Manufacturing PMI and Swןtzerland PMI; Eurozone PMI, Unemployment Rate, and CPI Flash Estimate; and US ISM Manufacturing PMI.
On Tuesday, there are Japan’s Average Cash Earnings; RBA Rate Announcement and RBA Rate Statement; UK Construction PMI; and US Factory Orders.
Wednesday sees the release of Australia’s Trade Balance and Retail Sales; Eurozone, UK, Italy, and Spain Services PMI; Eurozone Retail Sales; Canada and US Trade Balance; US Unemployment Claims, ADP Employment data, and ISM Non-Manufacturing PMI.
Thursday features the release of Australia’s Building Approvals; UK Asset Purchase Facility; BOE and ECB Rate Announcement and Statement.
Finally on Friday, the market will witness the release of Switzerland’s CPI; German Factory Orders; Canada Ivey PMI; and US and Canada Employment Data.