The dollar extends gains in the markets rising on the back of weak nations while currently the U.S. is the most stable economy out of the major economies. Investors are now focusing on the rising greenback as they have the most confidence on this currency since it is the only that is not betting for a future rate cut like major currencies.
The EU Zone released its retail sales for the month of July coming in at -0.4% lower than the expected reading of 0.1% yet higher than the prior reading of -0.6%, this data deteriorated the euro further as their GDP annual second quarter preliminary reading was released showing that it was revised lower to 1.4% from 1.5%. The EUR/USD is currently trading at 1.4394 while recording a high of 1.4517 and a low of 14387. We see the support for the pair at 1.4370 with a resistance at 1.4450.
The UK released its PMI services for the month of August coming in at 49.2 higher than both the prior reading of 47.4 and the expected reading of 47.0. The release of this data did not help the cable much as it remains weak in the market as the state of the UK economy is further weighing down the currency. The GBP/USD is currently trading at 1.7718 between the support of 1.7640 and the resistance of 1.7810. The pair recorded a high of 1.7831 and a low of 1.7666.
Investors are risk averse as they fear the falling UK and EU economy as they sell the high yielding currencies like the pound and the euro and buy the low yielding currency like the yen, in which we call unwinding of carry trades against crosses. The yen is still slipping versus the U.S. dollar. The USD/JPY is currently traded at 108.66 while recording a high of 109.08 and a low of 108.43. For the pair we see an intra day support at 108.40 and a resistance at 108.80.
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