Market Overview | Written by ActionForex.com | Jul 31 08 13:52 GMT |

Mid-Day Report: Dollar Tumbles on GDP & Jobless Claims, But Supported by Chicago PMI Dollar retreats further against most major currencies in early US session Q2 GDP missed expectation and grew at 1.9% annualized rate. GDP price index was rose much less than expected at 1.1%. Personal consumption grew 1.5% while PCE core was also below expecting, growing 2.1%. Jobless claims released today surged sharply to 448k, adding more pressure to the greenback. Though, better than expected Chicago PMI is providing some support to the greenback. Nevertheless, the retreat in dollar is somewhat expected from a technical point of view on overbought condition. With near term support still holding, the overall short term dollar bullish outlook doesn't change but will probably need a solid NFP number tomorrow to trigger another rally. Canadian dollar remains in tight range against the greenback after data showed the economy unexpectedly contracted by -0.1% mom in May. Aussie continued to be weighed down by disappointing retail sales released overnight and recovers relatively much weaker than other majors. Retail sales miss expectation and dropped -1.0% mom in Jun. Australia trade balance unexpectedly showed 411M surplus in Jun. Eurozone Jul HICP flash released earlier today showed inflation climbed to 16 years high of 4.1% yoy. Unemployment rate also climbed from 7.2% to 7.3% in Jun. Data from UK saw Gfk consumer confidence tumbled to record low of -39 in Jul. Nationwide house price dropped more than expected by -1.7% mom, -8.1% yoy in Jul. Swiss CPI dropped -0.4% mom, rose 3.1% yoy in Jul, above expectation of -0.5% mom, 3.0% yoy. Some volatility is seen in EUR/GBP but after all the cross is still staying in tight range. Weakness is more apparent in the Swissy as seen in strength in both EUR/CHF and GBP/CHF crosses. USD/CHF Mid-Day Outlook Daily Pivots: (S1) 1.0441; (P) 1.0481; (R1) 1.0522; More USD/CHF's retreat from 1.0520 continues as expected. As discussed before, mild bearish divergence conditions in 4 hours MACD suggests that USD/CHF could now be in consolidation to whole rise fro 1.0010. More choppy sideway trading could be seen with risk of pull back to 4 hours 55 EMA (now at 1.0357). But still, downside is expected to be contained by 1.0314 support and bring another rise. On the upside, though, break of 1.0520 will indicate rise from 1.0010 has resumed for 1.0623 resistance. In the bigger picture, recent development indicates that correction from 1.0623 should have completed at 1.0010 after meeting 61.8% retracement of 0.9634 to 1.0623 at 1.0012. Also, with 0.9995 structural support still holding, medium term rebound from 0.9634 is still in progress. Break of 1.0539 will argue that such medium term rebound has resumed for next cluster resistance (100% projection of 0.9634 to 1.0623 from 1.0010 at 1.0999, 38.2% retracement of 1.3283 to 0.9634 at 1.1028 for completion. On the downside, break of 0.9995/1.0010 support zone is needed to indicate that rise from 0.9634 has completed. Otherwise, further rally is still in favor even in case of a deep short term pull back.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:01	GBP	U.K. Gfk Consumer confidence Jul	-39	-37	-34
23:15	JPY	Japan Manufacturing PMI Jul	47	N/A	46.5
01:30	AUD	Australia Trade balance (aud) Jun	411M	-100M	-965M
01:30	AUD	Australia Retail sales M/M Jun	-1.00%	0.00%	0.70%
05:00	JPY	Japan Housing starts Y/Y Jun	-16.70%	-18.10%	-6.50%
05:00	JPY	Japan Construction orders Jun	-11.70%	N/A	-25.20%
05:45	CHF	Swiss CPI M/M Jul	-0.40%	-0.50%	0.20%
05:45	CHF	Swiss CPI Y/Y Jul	3.10%	3.00%	2.90%
06:00	GBP	U.K. Nationwide hse price M/M Jul	-1.70%	-1.20%	-0.9	-0.8
06:00	GBP	U.K. Nationwide hse price Y/Y Jul	-8.10%	-7.20%	-6.30%
08:00	EUR	Germany Unemployment rate Jul	7.80%	7.80%	7.80%
08:00	EUR	Germany Unemployment change Jul	-20.0K	-20.0K	-38.0K	-36.0K
09:00	EUR	Eurozone HICP flash Y/Y Jul	4.10%	4.10%	4.00%
09:00	EUR	Eurozone Euro zone CPI est. Y/Y Jul	4.10%	4.10%	4.00%
09:00	EUR	Eurozone Unemployment rate Jun	7.30%	7.20%	7.20%	7.30%
12:30	CAD	Canada GDP M/M May	-0.10%	0.20%	0.40%
12:30	USD	U.S. GDP annualised A Q2	1.90%	2.20%	1.00%	0.90%
12:30	USD	U.S. GDP Price Index Q/Q A Q2	1.10%	2.40%	2.70%	2.60%
12:30	USD	U.S. Personal consumption Q2	1.50%	1.40%	1.10%	0.90%
12:30	USD	U.S. PCE core Q/Q A Q2	2.10%	2.20%	2.30%
12:30	USD	U.S. Jobless claims	448K	390K	406K	404K
13:45	USD	U.S. Chicago PMI Jul	50.8	49	49.6