Optimism dominated the Asian session after China’s and Europe’s manufacturing data signaled ongoing improvement in the sector in both regions, thus supporting economic recovery on a global scale.
The Pound surged to a five-month high against the dollar as UK’s manufacturing data beat market expectations and expanded for the 10th consecutive month, thus supporting claims that UK’s economy is recovering faster than expected.
Meanwhile, the Yen depreciated against the dollar on reports that Asian economies recovery process are gaining momentum, which discarded demand for low yielding assets.
Friday’s GDP report from the US showed that the US economy expanded by 2.4 percent during the three months ending June 30, compared with the advanced GDP reading that showed an expansion of 2.7 percent. The US economy’s growth pace is easing as signaled more than once by the FED where Fed’s Chairman, Ben Bernanke stated that the economy of the US will witness a “Moderate” growth over the course of this year.
The US dollar index, a gauge of the dollar’s performance against six major currencies, depreciated slightly from the opening levels of 81.43 to trade at 81.42, where the index reached the highest at 81.55 and the lowest at 81.33. Gold declined to trade at 1176.73 an ounce, while Crude oil for September delivery rose to trade at 79.72 a barrel.
As for trading, the euro-dollar pair narrow traded so far where the pair opened today’s trading at 1.3061 while reaching the highest at 1.3089 and the lowest at 1.3052. Currently, the pair is trading at 1.3065. Trading above key support for the ascending channel at 1.2915 will maintain chances of the bullish trend continuing to test levels around 1.3115 then 1.3280.
Moving to the Royal currency, the pair extended its eight consecutive trading day rally where it’s currently trading at $1.5825, compared with the opening levels of $1.5702, the pair reached the highest at $1.5826 and the lowest at $1.5693. Observing trading is recommended for the remainder of today, especially as the pair touches the resistance levels at 1.5850 in order to determine its direction.
Finally talking about the dollar’s performance against the Yen, the USDJPY pair ascended as its trading at 86.66, compared with the opening levels of 86.33, the pair managed to reach the highest levels today at 86.87 and the lowest at 86.18. The pair is currently approaching a pivot resistance level at 86.65 accompanied by the Stochastic Oscillators movement towards overbought areas. We expect a downside intraday direction which will initiate targets at 85.95 that requires stability below 87.65.
