Among last week’s important news on the US economy we should mention the US Budget Balance, which remained deficit-ridden, but the deficit reduced almost by half in August, from -$165 billion to -$90 billion.
• Core Retail Price Index (RPI) in August rose from 0.6% against 0.1% in July.
• RPI increased from 0.3% to 0.4%.
• Business Inventories grew up to 1% from 0.5% in July.
• Empire State Manufacturing fell from 7.1 down to 4.1
• Import Price Index increased from 0.1% to 0.6%
• Capacity Utilization grew 0,1% ( 74.6% in July, 74.7 in August)
Despite the fact that the news turned out to be positive, Industrial Production Volume declined in August from 0.6% down to 0.2%.
Last Thursday was rich in news releases. PPI was 0.4%, 0.2% higher than expected. Unemployment Claims turned out to be better than expected as well, giving 450.000 claims, even though the difference with the last week is only 3.000.
Core PPI fell 0.2%
Trade Balance became more negative, increasing the gap by $14 billion.
Philadelphia Fed Manufacturing Index jumped from -7.7% up to -0.7%
Friday brought the news on Core PPI, which was down by 0.1%, leaving PPI as it is +0.3%
Michigan University Consumer Sentiment Index grew a little from 66.6 to 68.9. The positive data for the US, which came out on Thursday better than expected, made USD show rapid growth against the other major currencies. However the general tone doesn’t say the US economy goes to the next level of development. The final quarter of the year is expected to bring in the final changes.
The economic data on Great Britain were multidirectional, both positive and negative!
• Nationwide Consumer Confidence Index increased 5pts.
• RICS House Price Index accelerated its fall from -8% in July to -32% in August. That was a rather considerable fall.
• Jobless Claims grew 3300 claims
• Average Income (quarterly) increased 0.4%
Thursday’s news releases were especially interesting in the way GBPUSD reacted to them, waiting for the news on the US, which came out 4 hours later. Retail Prices made a sharp fall from 0.8% in July to -0.5% in August. Inflation Attitudes Survey, released by BoE, showed a 0.1% increase. Such negative data should have dropped GBPUSD down at once. However it happened only the next day, because the pair had been reaching its tactical aims and had not been ready to reverse on Thursday!
Japan brought the only news release - Tertiary Industry Index, which had grown by 1.4%.
As a result, the US data give hope and tell us about some positive changes in the economic development of the USA. In the short run it may affect the price rate of USD, which is already getting ready for an upward reversal after the prolonged decline. Consequently, the currencies going against USD (in this case GBP and JPY) will continue falling.
Now let’s proceed to the tech analysis provided by the Department of DFWA of Masterforex-V Academy
Last week USDJPY almost matched with the JPY forecast, having made a rebound from the mentioned level and gone down. Then followed a sharp increase. At this point, the pair has reached a new level ($85.60). Both downward rebound (with downward movement) and continuation of the bullish movement are probable. A prolonged downward correction is most likely. During the process of its formation we’ll be estimating the perspectives of the further growth of the currency pair up to the next level at $89.00.
Last week GBPJPY made a considerable upward move as well. It even exceeded our expectations, having broken through several resistance levels with one impulse! We had expected the rebound to take place at the level marked with the green line on the chart, but the level was easily overcome. So at this point the pair is expected around the next, “orange” level at 135.60. On reaching it the pair will reverse and go down for a considerably long period of time with a “cruising range” of about 880pts!
The tech analysis is provided by the Department of DFWA of Masterforex-V Academy
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