The European currency will continue its gradual strengthening against the US dollar, despite the good data released on the American economy yesterday. Support for risky assets is provided by the political crisis resolution in Germany, associated with a compromise on the issue of immigration, which was a kind of threat to the government.
The the New York business conditions report in the afternoon also put pressure on the US dollar.
According to the Institute of Supply Management ISM, the current business conditions index fell to 55 points in June from 56.4 points in May. Values above 50 indicate an increase in activity. The employment index rose in June to 63.4 points from 50.2 points in May, while the current income index rose to 50 points after dropping to 43.8 points in May.
The US Production orders in May rose helped bring down the demand for some currencies on Tuesday afternoon.
According to the report of the US Department of Commerce, US production orders in May showed an increase of 0.4% compared to the previous month and amounted to 498.2 billion US dollars. Economists had expected that production orders in May would remain unchanged.
If you do not consider the volatile categories of transport, production orders increased by 0.7% in May compared to the previous month. Excluding defense orders, production orders in May fell by 0.1% compared to the previous month.
As for the technical picture of the EUR/USD pair, everything remained unchanged. The first resistance frontier 1.1680 was pushed up, the breakthrough could seriously damage the stop orders of the sellers which would lead to a more active growth of the European currency, with the renewal of the highs of 1.1730 and 1.1780. In case of another unsuccessful attempt to break through the weekly highs, the pressure on the euro could increase significantly which will return the trading instrument to the larger support levels of 1.1580 and 1.1530.
The Australian dollar continues its steady growth against the US dollar. Yesterday, the support was provided by the Reserve Bank of Australia's decision , and today traders were satisfied with the good report on Australian retail sales which will support the momentum of the country's economic growth.
According to the Australian Bureau of Statistics, retail sales in May 2018 increased by 0.4% compared with April. Economists had expected sales to grow by 0.3%. As noted in the report, a sharp increase in the sales of department stores led to an increase in the indicator. Sales in department stores increased by 3.9%.
Today, a report was also published from the Bureau of Statistics, which indicated that the surplus of Australia's foreign trade in May was 827 million Australian dollars. Economists forecast a surplus worth 1.2 billion Australian dollars.
* The presented market analysis is informative and does not constitute a guide to the transaction.
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