Coming Up Today (all times GMT)

  • EUR German Prelim GDP q/q (06:00)
  • USD Core CPI m/m (12:30)
  • USD Retail Sales m/m (12:30)
  • USD University of Michigan Consumer Sentiment (13:55)

Worldwide stock markets continued to retreat on Thursday for a third consecutive session, but their declines were much less pronounced than those registered on Tuesday and Wednesday. It seems that after succumbing to panic, investors are taking a break to reassess global risks before re-entering the market.

Yesterday, negative news continued to flow from the US, as filings for unemployment benefits rose to a six-month high of 484,000, while previous week's figures were revised from 479,000 to 482,000. Also, in the high-tech sector, Cisco Systems plunged 10% to $21.36 after reporting quarterly revenue that missed consensus estimates. This raised the question on whether American companies could maintain earnings growth in a more challenging environment.

Today, Forex Traders are expecting to get a better picture of economic conditions, with the release of Q2 GDP in Germany and Europe, as well as July's Retail Sales in the US.

EURUSD

In the Eurozone, industrial production decreased unexpectedly by 0.1% in June and was particularly affected by the slowdown in Germany (-0,5%) and France (-1.6%), its two principal economies. In reaction, the euro dipped further to 1.2780 before bouncing back to 1.2830. Today, Q2 GDP for Germany and the Eurozone will be reported. Economists anticipate an increase of respectively 1.3% and 0.7%.

Support/Resistance: 1.2780/1.2890

GBPUSD

The British pound continued to lose ground against the dollar, finding short term support at 1.5560. In Wednesday's inflation report, the Bank of England emphasized that the pace of UK recovery would depend on its capacity to improve its trade balance. Therefore, the release of the European GDP (UK biggest trading partner) may generate volatility in the pound.

Support/Resistance: 1.5555/1.5690