The US dollar extended declines strongly for another day as economic data in the US continued to come out weaker. The latest reports showed that the U.S. housing starts fell 2.6% in April, missing estimates of 3.7% increase. Building permits were also down 2.5% against a forecast of 0.2% increase. The previous revisions also saw the numbers being trimmed, pushing the fourth quarter and Q1 housing data somewhat weaker than initially reported.
On the bright side, industrial production rose 11%, beating expectations of a 0.4% increase. However, the data did not help to soothe concerns as the U.S. dollar index futures were trading at a 7-month low.
Across the Atlantic, Eurozone’s preliminary Q1 GDP rose 0.5% as suggested by the preliminary data from earlier this month but the ZEW German economic sentiment fell to 20.6 missing forecasts of 22.3. In the UK, consumer prices jumped 2.7% on an annual basis, accelerating from 2.3% previously.
Looking ahead, economic calendar today will see the UK’s monthly job numbers with focus on wages. Average earnings is expected to post a modest increase of 2.4%, but will still be lagging behind inflation rate. The Eurozone will be publishing the final inflation figures which will confirm a rebound in consumer prices in April.
EURUSD intraday analysis
EURUSD (1.1104): The EURUSD rose to a 6-month high earlier today with price seen testing the waters above $1.1100. The strong pace of gains in the common currency comes from last Friday’s rebound in prices which quickly developed into a strong rally. With price now at 1.1100, we expect to see a moderate pullback towards 1.1000 ahead of what could be a sideways price action with the potential for prices to slip towards 1.0900.
USDJPY intraday analysis
USDJPY (112.48): Price action in USDJPY was fairly stable compared to the gains recorded by the EURUSD, although the dollar closed on a bearish note against the yen. Price is seen testing 112.50 support on the daily chart currently and a break down below this level could trigger further declines towards 109.50 – 110.00 region. However, in the near term, USDJPY could be seen trading range bound within 113.50 and 112.50 with a break out from either of these levels signaling the next trend.
GBPUSD intraday analysis
GBPUSD (1.2930): The British pound has managed to hold on to the gains after gapping lower on Monday’s open, close to 1.2800 support level. Still, the currency consolidation above 1.2800 is looking weak with price still trading below the previous highs of 1.2988. In the near term, the breakout from 1.3000 or 1.2800 will be critical in shaping further trends in GBPUSD. On the 4-hour chart, price action looks bearish after failing to close higher from the breakout level off the rising wedge pattern that was formed last week.