EUROPEAN session review: Dollar compensates morning losses

Data released (actual, consensus, previous):      

08:30 GMT UK Total Trade Balance (Jun)  £-1.548B    £-2.350B    £-2.612B     

08:30 GMT UK Goods Trade Balance (Jun)  £-8.082B    £-8.500B    £-8.668B     

08:30 GMT UK Trade Balance; non-EU (Jun)   £-2.646B    £-3.800B    £-4.019B     

09:00 GMT UK  CB Leading Economic Index (Jul) -0.2%   _     0.4%

The dollar compensates morning losses gradually. However, this is just fixing before weekend. At the same time European macroeconomy data look positive for investors.

EURO:

Euro-area’s gross domestic product expanded 0.2% in the second quarter, after contracting for the previous six quarters, according to the median estimate before the report is released on Aug. 14. 

EUR/USD has dipped into the red ahead of the US Open. Support can be seen at 1.3338, 1.3295 and 1.3263. Ahead, resistance can be seen at 1.3413, 1.3445 and 1.3488.

POUND:

UK economic forecasts have risen according to a monthly survey. Q3 2013 annualised GDP revised up to 1.1% from 0.8% Q4 2013 up to 1.8% from 1.4% Q1 2014 2.0% from 1.6% 2014 average at 1.7% from 1.6% 

GBP/USD dropped after it couldn’t break above 1.5560. Moreover, we can see bearish divergence on hourly charts. Initial support area is at 1.5480/1.5520. The pair will drop faster when break it. Breaking of 1.5560 is unlikely.

YEN:

The yen corrects vs the dollar. 

USD/JPY recovered from yesterday’s lows on Y95.80 (initial support) and remains under pressure. Below losses may widen to Y95.20 (Jun 7 lows) and Y93.80 (Jun 13 lows). Initial resistance comes at daily highs on Y96.80, above - at Y97.60 (Jul 31 lows) and Y98.80.

DATA AHEAD:

At 12:30 GMT Canada will present jobs data.

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