USD recovered some significant ground versus most currencies and commodities helped by solid job data. Initial jobless claims dropped to 255k versus expectation of 275k. In the UK, Retail Sales were terrible. -0.2% versus expectation of 0.3% resulting in a 170 pip move lower to 1.5500 from 1.5670.

The biggest mover today in Asia was the AUDUSD. Falling commodity prices and a possible FED rate hike caused the selloff which is also attributed to the weak PMI report out of China. As a result, and due to the fact that Australia is also a gold exporter, GOLD fell over $10 to around $1080.

EURUSD remains more or less unchanged and trades near 1.0970 in a tight range of 30 pips. OIL is also lower following the commodity selloff and traded as low as 48.64.

Economic releases today are dominated by a number of PMI releases in the euro area which are expected to show a small decline from elevated levels. In the US we have new home sales release and July manufacturing PMI. After a series of better-than-expected data out of the US – illustrated yesterday by the lowest jobless claims figure since 1973– the releases today will likely show a solid US recovery with housing picking up and consumption growing decently.

Trading Quote of the day:

“It's better to lose your opinion, than to lose your money”

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.0915
Likely scenario: Long positions above 1.0915 with targets @ 1.1035 & 1.1085 in extension.
Alternative scenario: Below 1.0915 look for further downside with 1.087 & 1.081 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

GBPUSD

Pivot: 1.557
Likely scenario: Short positions below 1.557 with targets @ 1.549 & 1.5465 in extension.
Alternative scenario: Above 1.557 look for further upside with 1.561 & 1.564 as targets.
Comment: A break below 1.549 would trigger a drop towards 1.5465.