CHANCE OF RATE HIKE IN THE UK INCREASES
The EUR/USD is gaining positions following positive news on the German trade surplus which in August reached 21.6 billion euro which is 0.8 billion euro more than expected. Exports in the largest European economy increased by 3.1% and imports expanded by 1.2%. The annual rate of export growth declined to 7.2% which is 0.8% worse than in July. The greenback is feeling some pressure from disappointing data on NFIB small business index which reduced to 103.0 in September against 105.1 forecasted. Investors are waiting for the release of the FOMC meeting minutes tomorrow and in case of hawkish comments regarding a rate hike in December, we may see the EUR/USD slip downwards. At the same time traders are closely watching the news from Catalonia and in case of easing tensions in Spain we may see a rise in euro quotes.
The British pound kept growing amid positive news on manufacturing production growth in the country by 0.4% in August which is twice more than forecasted. On the other hand, the latest report on wage growth in the second quarter of 2.4% compared to 1.6% in the previous reading resulted in an increase in confidence for the start of monetary tightening by the Bank of England in 2017 and two more rate hikes during the next year.
The Australian dollar keeps consolidating in anticipation of new drivers. Traders’ mood today may be influenced by the report from Westpac on consumer sentiment in Australia at 23:30 GMT.
The price has broken through the inclined resistance line and in case of overcoming the closest resistance at 1.1825 the chances of continued growth will significantly increase. In this case the immediate targets will be at 1.1925 and 1.2000. If the fall resumes, the next goals within the negative trend will be at 1.1750 and 1.1620.
The sterling is confidently rising and the recent breaking through the upper boundary of the descending channel may become the basis for continued price growth to 1.3250 and 1.3400. According to the RSI on the 15-minute chart, the upward momentum is not yet exhausted. We also do not exclude the price dropping to the 1.3000-1.3050 range in the near future.
The aussie quotes are consolidating within the 0.7740-0.7800 range. In order to change the current trend to positive, the price has to gain a foothold above 0.7800. In the reverse scenario, breaking through the local low at 0.7740 may become a trigger for the fall acceleration to the 0.7700 and 0.7600 range. After the end of consolidation, we are likely to see a rise in volatility.