INFLATION IN THE US SHOWED ZERO GROWTH
The greenback weakened against other major currencies after disappointing data on inflation and retail sales for June was published. The consumer price index failed to show any growth for the previous month against the expected increase of 0.1%. Slower inflation growth reduces the chances of a third rate hike by the Fed for this year. Additional pressure on the US dollar came from news on retail sales that in June decreased by 0.2% compared to the previous month. Experts forecasted expansion of 0.1%. Some positive news for the American economy came from the report on industrial production that has grown by 0.4% in the past month, which is 0.1% better than expected. The euro also saw negative effects following news on the trade balance for the region that came it at only 19.7 billion compared to the anticipated 20.3 billion.
The aussie continued growth following positive dynamics from the commodity markets. Strong moves are also expected on Monday after the release of important macro data from China on its GDP growth and industrial production. China is the main buyer of Australian export goods and the state of its economy has a strong impact on the AUD/USD. Oil prices are also dependent on the Chinese data because the country is one of the major oil importers along with the US. Oil traders today will be closely monitoring the news from Baker Hughes oil service company on active drilling rigs count.
The EUR/USD quotes, after some consolidation within the triangle, have broken the upper limit and the closest resistance at 1.1450. This will stimulate the bulls to push the price further up with the first target at 1.1500, after which overcoming, the next objective will be 1.1620. In order to switch from the current upward trend to negative, the price needs to break through the inclined support and the level of 1.1300.
The USD/JPY was unable to continue growth within the rising channel despite the weak statistics on industrial production in Japan that in May declined by 3.6%, and as a result broke its lower limit and the support at 113.00. This is the basis for continued decline with the closest targets near 111.70 and 110.90. In case of a rising correction, we may see the price increase up to 113.50. The level of volatility is likely to remain high today.
The Australian dollar accelerated growth after the publication of disappointing statistics on consumer inflation in the US. Within the strong upward impulse, quotes were able to climb above 0.7800 and the next target is located near 0.7880. The RSI on the 15-minute chart is far in the overbought territory that may be a signal about a possible downward correction in the near future.
The quotes of light sweet crude oil benchmark show a high level of volatility ahead of the drilling rigs count report from oil service company Baker Hughes. Lately, the price was able to fix above 46.00 that has become the basis for a further increase up to 47.00 and 47.75. In case of breaking through the lower limit of the rising channel, we are likely to see the drop to 45.40 and 44.75.