The US dollar rally continued today and we saw a sharp rise in volatility following the release of important macro data on inflation in America. The consumer price index for August increased by 0.4% versus the 0.3% expected and 0.1% in the previous period. Alongside the core consumer price index also grew by 0.2% which was in line with expectations and twice better than in July. Acceleration of inflation may force FOMC members to vote in favour of another interest rate hike in December and that will add further strength to the greenback. USD was under pressure over the past month due to internal political reasons with the current administration, the geopolitical confrontation with North Korea and the dovish mood of traders regarding a third rate increase by the Fed for 2017.
The pound ignored the positive trend of the USD due to hawkish rhetoric from the Bank of England. Despite leaving the key rate at 0.25%, officials of the central bank pointed to possible monetary tightening in the UK over the next months. At the same time, it was noted that in case of confident economic expansion the monetary policy may be tightened by more than what the market is expecting. These statements were met favourably by sterling bulls but their optimism may be hurt by negative news over Brexit talks or further US dollar strengthening.
The aussie kept losing ground despite the growth of employment by 54,200 in August compared to the 17,500 expected. The descending impulse is mostly explained by weak statistics from China, according to which industrial production slowed to 6.0 % growth in July which was 0.6% worse than expected. The Australian economy is particularly sensitive to changes in Chinese industrial data as the nation is the main importer of Australian commodities.
EUR/USD
The EUR/USD quotes demonstrated high volatility levels after the price was able to fix below 1.1925. This may be a reason for continued declines to 1.1750 and 1.1620. The MACD signal line on the 15-minute chart just crossed the zero line which points to a possible negative trend continuation. In case of growth resuming, the closet resistance lines will be located at 1.1925 and 1.2000.
GBP/USD
The bullish impulse on the GBP/USD chart resulted in the renewal of this year’s highs. The closest target within the positive trend is at 1.3400 and its overcoming may stimulate investors to push the price up to the 1.3500-1.3600 range. In case of profit taking, we may see a rollback with the closet goals at 1.3250 and 1.3150.
AUD/USD
The AUD/USD demonstrates a confident descending impulse after some consolidation near the 0.8000 level. The RSI on the 15-minute chart approached the oversold zone, that together with the price coming close to the angled support line, may result in an upward rebound soon with potential growth to 0.8000. The next target within the local descending trend will be at 0.7870.
General Risk Warning for FX & CFD Trading. FX & CFDs are leveraged products. Trading in FX & CFDs related to foreign exchange, commodities, financial indices and other underlying variables, carry a high level of risk and can result in the loss of all of your investment. As such, FX & CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with FX & CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to FX or CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.
Recommended Content
Editors’ Picks
![EUR/USD stays below 1.1100, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/european-euro-coin-on-top-of-american-dollar-bill-11292130_XtraSmall.jpg)
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
![GBP/USD struggles to find a foothold, trades near 1.3150](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-157771037_XtraSmall.jpg)
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
![Gold retreats toward $2,500 ahead of the weekend](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
![Week ahead – Investors brace for NFP amid Fed rate cut speculation](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/america-back-to-work-gm178972493-25143312_XtraSmall.jpg)
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
![Easing Eurozone inflation to back an ECB rate cut in September](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/Eurozone/eu-flags-flying-at-the-european-commission-building-brussels-belgium-24759579_XtraSmall.jpg)
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.