Price action appeared erratic overnight as the market seemed determined to find directional momentum in otherwise mundane environment. Indeed, the lack of any significant releases going into the Euro session could open the door for greater volatility than otherwise expected, as it will be difficult to tell what will serve as the impetus for movement.
Key Overnight Developments
• Final Japanese Industrial Production Readings
• Jittery Markets May See Greater Volatility on Empty Calendar
Critical Levels
Overnight Euro price action saw the pair consolidate US session gains below the 1.58. DailyFX Technical Analyst Jamie Saettele believes the downward correction may be over, with the pair turning upward to target resistance at 1.5900. A further downside breach eyes support at 1.5534. The sterling held near US session highs, oscillating in a 34-pip range above the 1.98 mark. Support remains at 1.9648, while resistance stands at 2.0175
Asia Session Highlights
REINZ House Sales improved a bit, showing decline of -42.4% in the year to June versus -52.9% in the preceding month. While this sees the metric rise marginally higher from all-time lows, it still paints a picture of a housing market in broad decline as New Zealanders are discouraged from big-ticket purchases by a deteriorating economy and record-high borrowing costs. The release went by virtually unnoticed by the market.
The final revision of May’s Japanese Industrial Production saw the reading print slightly below expectations, with both the monthly and the annualized growth figures underperforming the initial estimates by 0.1%. USDJPY saw a bit of movement at the release, moving 33 pips higher in the first 20 minutes following the announcement. The reaction appears speaks to the sensitive nature of the current marketplace, as an otherwise minor jolt is able to induce a reaction from jittery traders. Japanese Consumer Confidence set a new low in June, dropping to 32.9 versus 34.1 in the preceding month. The release means little for the island nation’s economic prospects going forward as exports have been seen as the primary growth engine for some time now.
Euro Session: What to Expect
Today sees the calendar absolutely empty of any economic data releases. While this would normally make for a quiet session, the markets’ particular sensitivity this week saw price action find catalysts in the most unlikely places. As reported by DailyFX Chief Strategist Kathy Lien, the absence of substantial US data has seen the EURUSD cling to the Dow for short term directional momentum. Indeed, the lack of any significant releases could open the door for greater volatility than otherwise expected, as it will be difficult to tell what will serve as the impetus for movement.
To contact Ilya regarding this or other articles he has authored, please email him at ispivak@dailyfx.com.
