Will US data get the dollar back on track before the holiday

The inflation report hearing yesterday didn’t leave us with much more to go on; more of the same remarks from Carney mainly that the rate rises will be gradual, but look set to happen as expected in mid-2015. One point was that in the near term it looks like the inflation data will drop below 1 %, which will keep pressure on the pound. GBP/USD is currently trading just above the 1.5700 level, pushed higher by a weaker US consumer confidence yesterday. Today’s data out of the UK is the second GDP estimate for the quarter, with an expected no change at 0.7%.

The US data yesterday was key to all the moves in the majors. GDP came in higher at 3.9%, a good bit of growth for the US economy, which got the USD moving higher. All seemed to be back in its normal trend of late, but then came the consumer confidence which was expected to be higher than the previous at 95.9 but ended coming in at its lowest since June at 88.7, showing an increasing lack of confidence in the US. The USD dropped it gains and with a holiday coming up tomorrow it will look today to get back on track.

Today’s US data starts off with core durable goods orders with an expected rise to 0.5% from a previous read of -0.1%., Then comes the unemployment claims with a an expected drop to 287k from 291k, and finally the new home sales expected to rise to 471k from 467k. So if all expected data comes in we could be seeing the USD back in its upward trend putting pressure on the other pairs.

The euro area has no data today so is very much in the hands of the GBP and USD reactions to data, like yesterday catching a ride higher after weaker US data. Currently trading below 1.2500 level.

The Aussie has the Capex due out overnight so one to be careful of; the expected data is a fall to -1.7% from 1.1%. The Kiwi has its trade balance data to look out for also expected at -645m from previous -1350m.

EUR/USD

Supports 1.2425 1.2370 1.2340  | Resistance 1.2510 1.2540 1.2595

USD/JPY

Supports 117.50 117.20 116.70 | Resistance 118.30 118.75 119.05

GBP/USD

Supports 1.5670 1.5615 1.5580  | Resistance 1.5755 1.5790 1.5840