Who would have thought it: Not long ago, the euro seemed to depreciate to parity against the U.S. dollar. Now, however, on the back of China’s devaluation and a cloudy outlook for a Federal Reserve rate increase, the euro is trading as a safe-haven. A September liftoff is still on the table, but expectations for the first rate hike since 2006 have been pushed back.
The euro broke above its 1.11- resistance, touching a one-month high of $ 1.1213. This level could meanwhile act as a new hurdle for the currency pair. Above 1.1215, chances are that the euro heads for a test of 1.1279 and further 1.1375.
Below 1.1040 the euro could again tend towards its support around 1.09-1.0850.
The British Pound did not move much yesterday. Our long-trade has exactly reached its profit target, and that was yet the highest level. GBP/USD is still captured within a consolidated trading range between its resistance zone 1.5650-90 and a current support at 1.5450. Traders will need to wait for break-outs of this range before expecting fresh momentum to either side.
U.S. Advance Retail Sales are scheduled for release today at 12:30 GMT, an important report which could trigger a strong reaction in the dollar.
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