Economic data is back in the spotlight on Wednesday, with market-moving reports from both sides of the Atlantic scheduled for release. Currency traders are keeping close tabs on the US dollar, which rose on Tuesday to fresh yearly highs.
The United Kingdom will headline the European economic calendar on Wednesday. At 08:30 GMT, the Office for National Statistics will release three inflation gauges: consumer price index, producer price index and retail price index.
Shifting gears to North America, the US Department of Commerce will report on retail sales at 12:30 GMT. Receipts at retail stores are projected to rise 0.1% in July after climbing 0.5% the month before. Excluding automobiles, sales are projected to rise by 0.3%.
In a separate release, the Federal Reserve Bank of New York will release the Empire State Manufacturing Index for August. The monthly indicator is forecast to come in at 20.0 from 22.6 in July.
Forty-five minutes later, the Federal Reserve will release its monthly industrial production report. The July indicator is expected to show growth of 0.3%. Output at US factories climbed 0.6% in June.
At 14:00 GMT, Commerce will report on business inventories for June. Stockpiles likely rose 0.1% month-on-month, according to a median estimate of analysts.
EUR/USD
Europe’s common currency plunged to fresh 2018 lows on Tuesday, as the dollar continued to assert its dominance on the global currency system. The EUR/USD exchange rate settled in the 1.1350 range on Tuesday and has since fallen to 1.1335. According to analysts at Danske Bank, further downside should not be ruled out, which means more yearly lows are likely over the short term. From a technical perspective, the pair is now eyeing immediate support at 1.1300. On the opposite side of the spectrum, immediate resistance is located at 1.1365, the low from Tuesday.
GBP/USD
Cable also experienced a sharp selloff on Tuesday, as prices bottomed in the low 1.2700 range. GBP/USD was last seen trading at 1.12709, where it was down 0.1% from Tuesday’s close. With the pair plumbing new 13-month lows, immediate support is located at the psychological 1.2700 level. Below that, the bears are eyeing 1.2640 as the next breaking point. On the opposite side of the ledger, immediate resistance is located at 1.2825, the high from Wednesday, followed by 1.2910.
USD/JPY
The dollar lost ground against the yen on Tuesday but has since recovered to trade at one-week highs. After bottoming at 110.19 on Tuesday, the USD/JPY exchange rate has recovered to 111.38. In terms of technical indicators, the pair faces immediate support at 111.00, followed by 110.58. USD/JPY is currently testing the 111.36 resistance, which corresponds to the 61.8% Fibonacci retracement. Above that level, 112.14 is the next major target.
