Statistics New Zealand reported that exported goods’ value sold in July declined 3.3 percent compared to a year ago, and this put the Trade Balance to –NZD692 million, far weaker than the –NZD475 million expected by analysts. Moreover, the June data was revised down slightly, from NZD247 million to NZD242 million.
In the United States, Durable Goods Orders surged 22.6 percent in July as commercial aircraft demand increased on record bookings. The actual number was almost thrice what analysts have expected. The core reading dipped 0.8 percent following a 1.9 percent increase in June. The June headline reading, meanwhile, has been revised higher to 1.7 percent from 0.7 percent.
The Conference Board in the US reported that Consumer Confidence hiked to 92.4 in August, staying above the 90 level for the second consecutive month. Meanwhile, Prelim GDP rose 4.2 percent while Pending Home Sales jumped 3.3 percent in July. Chicago PMI and Revise University of Michigan Consumer Sentiment were also in the green at 64.3 and 82.5, respectively.
Gold printed an inside bar this week as bulls struggled to gain a foothold of the $1,300 level. Price traded within a $22 range and it barely closed in the green. The lack of bullish confidence to break through $1,300 is a concern, but bulls can still make up for lost time in the coming week. If they don’t, we could see price roll down further toward $1,250.
Oil also closed to the upside with an inside bar this week, but the former considerably fared much better in terms of weekly close. That does not mean Oil is out of harm’s way; Bears are targeting a break of $93 so they can ease their way toward $90-$91. Bulls need a move back through $100 to feel a bit safer.
EURUSD’s downside gap this week has been very concerning especially if we consider the fact that it happened after 6 weeks of consecutive declines. The pair is now approaching the 1.30-1.31 area which it has never seen since mid-July of 2013. We need to see a weekly bullish close above 1.3200-1.3300 in the coming week to trim the ever-growing bearish momentum.
Unlike EURUSD, GBPUSD was able to close in the green this week, the first time it ever did since the June-July transition. The preferable scenario for this pair is to see a strong close through 1.6600 and 1.6700.
USDJPY had seen an interesting situation this week as price closed the week in the red but comparatively higher than last week’s close. This could be an indication of a tug-of-war which I alluded to during the prior week, as USD and Yen supporters vie for control. Price action-wise though, bulls won and they are aiming for 105 right now.
The Week Ahead
The start of the new month will see a barrage of economic data this week.
On Monday, there will be New Zealand Overseas Trade Index; Japan’s Capital Spending; Australia’s Company Operating Profits; China’s Manufacturing PMI and HSBC Final Manufacturing PMI; Spain, Italy, and UK Manufacturing PMI; UK Net Lending to Individuals; and Switzerland’s SVME PMI. Canada and the US will be on holiday to celebrate Labor Day.
On Tuesday, traders will focus on Australia’s Building Approvals, Current Account, , Interest Rate Announcement, and RBA Rate Statement; Spain’s Unemployment Change; UK Construction PMI; and US ISM Manufacturing PMI.
China will kick off Wednesday with the Non-Manufacturing PMI, followed by Australia’s GDP data and RBA Governor Stevens’ speech; UK Halifax HPI; Italy, Spain, and UK Services PMI; Eurozone Retail Sales; BOC Rate Announcement and Statement; and US Factory Orders and Beige Book.
Thursday will remain busy with Australia’s Retail Sales and Trade Balance; BOJ’s Press Conference and Monetary Policy Statement; BOE’s and ECB’s Rate Announcement and Statement; US Unemployment Claims, ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, and Trade Balance; and Canada Trade Balance.
Finally on Friday, the week will end with Japan’s BOJ Monthly Report; Germany’s Industrial Production; Switzerland’s Foreign Currency Reserves; US Non-Farm Employment Change and Unemployment Rate; Canada’s Ivey PMI, Employment Change and Unemployment Rate.