The British monthly GDP is announced on Friday at 09:00 MT time.
What drives the market on August 12?
The US dollar edged higher, while gold dipped down. Let’s discuss main news and market movements in detail.
- The day started with the monetary policy statement from the Reserve Bank of New Zealand. The central bank increased asset purchases from 60 billion to 100 billion New Zealand dollars, releasing a dovish statement. The New Zealand dollar slumped after the report. In addition, new cases rose on the country, that forced the government to impose stricter restrictions.
- Moreover, the US talks over the fiscal stimulus package continue. Even Donald Trump’s executive orders didn’t speed up the agreement between Democrats and Republicans. New infections surged in California. Deaths reached the highest level since June of 1 400, according to yesterday’s reports. The growth of US bond yields underpinned the US dollar and weighed on gold. The such a massive sell-off in gold also happened because of profit takers.
Let’s look at the chart. If NZD/USD falls below the support at 0.6530, it may fall even deeper to the next strong support at 0.6400, which the pair failed to break in July. If it jumps above the resistance at the high of July 9 at 0.6600, it will open doors towards the next resistance at 0.6700.
EUR/USD reversed from the support at 1.1715. If the price breaks through the resistance at 1.1750, it will surge to the key psychological mark at 1.1800. Support levels are at 1.1715 and 1.1700.
Let’s move on to gold. It was falling down sharply, but bounced off the support at $1 875. If it crosses $1 930, it will clear the way towards the key psychological mark at $1 950. Support levels are at $1 875 and $1 800.
The British pound surged higher after the better-than expected GDP release. It turned out 8.7%, while the forecast was 8.1%. If GBP/USD breaks out the high of August 7 at 1.3050, it will surge to 50 moving average at 1.3090. Support levels are 1.3020 and 1.2980.
- The US CPI will be out at 15:30 MT time! Don't miss out!
- Crude oil imvemtories will be released at 17:30 MT time!
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.