The United States had a slew of mixed data this week, highlighted by the release of the US Unemployment Claims and the Preliminary University of Michigan Consumer Sentiment. Jobless Claims breached the 300,000 mark and registered only 292,000 claims in the prior week compared to a 332,000 forecast. On the other hand, the preliminary reading of University of Michigan Consumer Sentiment hit 76.8, the first below-80 reading and the lowest since April. The US Census Bureau reported that Retail Sales increased by 0.2 percent, while the Department of Labor said Producer Price Index rose 0.3 percent.
In other news, UK’s Claimant Count Change improved to -32,600 in August, better than the expected -21,200 reading. This followed a -36,300 reading back in July. The Unemployment Rate saw a minor improvement to 7.7 percent.
In Australia, the Bureau of Statistics announced a surprise second monthly decline in August, sliding 10,800 when analysts were expecting an increase of 10,200. The Unemployment Rate came in as-expected at 5.8 percent.
Statistics Canada publicized that Building Permits surged in July, following a sharp decline in June. Newly-issued Building Permits amounted to CAD8 billion or 20.7 percent, putting it in a consistent upward trend with six advances out of the last seven months.
Finally, the Reserve Bank of New Zealand decided on Thursday to leave the Official Cash Rate unchanged at 2.50 percent. In his statement, RBNZ Governor Wheeler said the local economic recovery is getting more “broad-based” and the board sees a possible rate hike sometime next year.
Gold had a very tough week as buyers failed to recapture a solid foothold above $1,400. Price did not even touch the $1,400 level despite trading just $6 away from it on Monday. Price went pretty much all downhill since then, and it nearly crossed the $1,300 border as bulls struggled to create an efficient barricade on $1,350 and $1,320. The weak bounce to and close around $1,325 puts bulls in serious danger next week. More supporters are required to buoy price early next week.
Oil performed slightly better than Gold this week as the $108 area continued to magnetize both buyers and sellers. Bulls are in a better position here, so they must promptly lay the foundation next week and aim for higher prices. Topside resistance remains at the $110-$112.50 area.
EURUSD traded well bid this week after reaching a 1.3103 low in the prior week. If bullish momentum has indeed been boosted, we could see price propel higher even before mid-week. But raging bulls should proceed with caution when the 1.3400-1.3500 is reached.
GBPUSD led the majors this week and flew high with more than 270 pips. The pair inched closer to the 1.5900 level and closed the week with a very strong finish at 1.5875. Bulls should anticipate potential price caps as sellers try to limit further upside moves. The coming week will be an interesting test on the current bullish momentum’s strength.
USDJPY traded barbs this week as the pair just bobbed up and down in a 160-pip range above 99.00. Although the week closed in the bears’ favor, the pair stayed comfortably above the 99.00 level. Furthermore, potential support could limit further declines in prices. Potential corral is found at 98.50-99.00 to 100.50-110.00.
The Week Ahead
On Monday, New Zealand kicks off the brand new week with the release of Westpac Consumer Sentiment; UK Rightmove HPI; China’s Foreign Direct Investment; Eurozone Consumer Price Index; Italy’s Trade Balance; Canada’s Foreign Securities Purchases; US Capacity Utilization Rate, Empire State Manufacturing Index, and Industrial Production.
On Tuesday, traders will keep an eye on Australia’s Monetary Policy Meeting Minutes; China’s CB Leading Index; Eurozone’s Current Account; UK’s RPI, PPI Input, CPI, and HPI; Eurozone ZEW Economic Sentiment; Canada’s Manufacturing Sales; US CPI and TIC Long-Term Purchases.
On Wednesday, there will be New Zealand’s Current Account; Australia’s MI Leading Index; UK MPC Asset Purchase Facility and Official Bank Rate Votes; and US Housing Starts, Building Permits, FOMC Statement, Federal Funds Rate, and Economic Projections.
Thursday gets to become the busiest again this week with a flurry of economic data releases such as New Zealand Gross Domestic Product; Japan’s Trade Balance; Reserve Bank of Australia’s Bulletin and Annual Report; Switzerland’s Trade Balance, Libor Rate, and SNB Monetary Policy Assessment; UK Retail Sales and CBI Industrial Order Expectations; Canada’s Wholesale Sales; US Jobless Claims, Current Account, Philly Fed Manufacturing Index, and Existing Home Sales.
Friday ends the week with UK Public Sector Net Borrowing, Canada’s Consumer Price Index; and Eurozone Consumer Confidence.