Dollar’s broad-based selloff continues in Asian session today. There are increasing concerns that momentum of US economic recovery is starting to falter. The pessimism is somewhat reflected in persistent decline in treasury yields too. Though, Canadian Dollar is even worse as pressured by sharp decline in oil prices. Euro and Sterling continue to stay strong across the board. Euro will be facing some tests from GDP data today, but it will likely survive downside surprises.
WTI crude oil defending 38.45 support for now, but looks vulnerable
WTI crude oil drops sharply to as low as 38.58 overnight, but recovery ahead of 38.45 support. Though there is no following buying for further recovery above 40 handle. 38.45 support now looks rather vulnerable. Sustained break of 38.45 should confirm rejection by 42.05 key resistance. Deeper fall should then be seen back towards structure support level at 31.23, to correct the rebound from April’s spike low.
The economic calendar is very busy today. Eurozone Q2 GDP will be a major focus, together with July CPI flash. France and Italy will also release Q2 GDP while Germany will release CPI. Swiss will release retail sales. Later in the day, Canada GDP will be a focus while RMPI and IPPI will be featured. US will release personal income and spending with PCE inflation, employment cost and Chicago PMI.