FX.co ★ Accumulation of Forces before a Jolt

EUR/USD, GBP/USD

The markets were calm on Monday. Following Friday's fall, the euro slightly corrected upward while the British pound slightly declined. The British Market is increasingly infiltrated by the notion of slow negotiations on Brexit. Even the former head of the Diplomatic Service, S. Fraser, assesses the process almost as the process almost as a failure due to disagreements within the British government that can not put forward a consolidated position before the EU. In Germany, industrial production fell by 1.1% in June against the expected growth of 0.2%. The Sentix index of investor confidence in the eurozone in August fell from 28.3 to 27.7.In the U.S., consumer lending in June amounted to $12.4 billion compared to $18.3 billion in May. Fed 's J. Bullard spoke and stated that the short-term rates are fine where it is at the present time. But investors do not expect an increase in September.

Today, trade balances of Germany and France for the month of June will be released. Germany's trade balance is expected to increase from 20.3 billion euros to 20.8 billion. For France, a decline from -4.9 billion to -5.1 billion euros. In the U.S., the index of optimism in small businesses for July is expected to be at the June level of 103.6, and the number of open vacancies in the labor market, with the exception of the agricultural sector, is expected to rise to 5.74 million from 5.67 million, which confirms the words of Yellen regarding the prospects of growth of the labor market.

The euro is expected to be at 1.1650, while the pound sterling is projected to be in the range of 1.2935/70.

AUD/USD

On Monday, thanks to the efforts of representatives of the RBA who announced an overvalued Australian dollar, the currency fell 14 points. This is against the growth of the index in the construction sector in July from 56.0 to 60.5. Today, NAB's index of business confidence for July showed an increase from 9 to 12. But China published unexpected data once more; export in the July fell from 11.3% y/y to 7.2% y/y, with the expectation of a decrease to 10.9% yoy, imports decreased from 17.2% y/y to 11.0% y/y while waiting 16.6% y/y. Due to a strong drop in imports, the trade balance rose from $42.77 billion to $46.74 billion. Investors, of course, paid attention to the balance sheet structure, and the China A50 edged down 0.41%. Together with it, the Australian S&P/ ASX200 lost 0.83% with additional concerns for the mining sector - yesterday iron ore collapsed in price by 6.35%, to 69.09 dollars per ton. The Chinese province of Hebei plans to reduce steel production by 50% until November. Chinese ports are loaded almost to record volumes with iron ore (139.15 million tons against an historic record of 141.45 million).

Investors are left to monitor the rate of the US dollar. On its strengthening, a decline in the Australian currency is expected. It's price is expected to be at 0.7830 and further in the range 0.7710 / 50.