Euro recovered to balance line
- Sales of new homes in the United States in September soared by 14%
- US consumer confidence index unexpectedly rose in October
- The SP500 index has renewed its all-time high at 4598.53
- The yield on 10-year bonds fell to 1.61% per annum
- Gold fell in price by $ 25, to $ 1,782 per troy ounce
- Chinese authorities told the head of China Evergrande Group to sell personal property
- States withdrew China Telecom's permission to work in the United States
On Tuesday, October 26, the euro fell 0.10% against the dollar, to 1.1596. At the beginning of the session, the price rallied to 1.1626. The demand for risky assets remained until the American session. After the release of statistics in the US, the dollar strengthened throughout the market. By the close of trading in Europe, the price fell to 1.1585.
The consumer confidence index in the USA unexpectedly rose to 113.8 points in October against 109.3 points in September (the forecast was 108.3 points).
New home sales in the United States in September soared 14% month-on-month to 800,000 on an annualized basis (the forecast was 760,000).
Scheduled statistics (GMT +3):
At 11:00 Switzerland is to publish the ZEW Economic Expectations Index for October. At 15:30 in the US, there are data on durable goods orders and trade balance for September. At 17:00 the Bank of Canada will announce its decision on the interest rate. At 17:30, the US Department of Energy will publish oil reserves. A press conference of the Bank of Canada will take place at 18:00.
At the time of this writing, the major currencies are almost all in positive territory. The Australian dollar shows the maximum yield. The Aussie rose on above-expected core inflation data from Australia.
In the morning, the market was in a fever due to news from China and the United States. The Chinese authorities told the head of China Evergrande Group, Hui Ka Yan, to sell his property (more than $ 7 billion) to pay off creditors and ease the deepening debt crisis.
The authorities made it clear that they were not going to pull him out of the debt hole. Investors believe that his property is illiquid. The news had a negative impact on Asian stocks. The Hand Sang Index fell 1.83% to 25577.
In the United States, the Federal Communications Commission (FCC) on Tuesday revoked its license for a division of China Telecom, one of the top three communications service providers in China. It is believed that the United States took such a step because of Taiwan. The FCC said China Telecom (America) "has raised significant risks to national security and law enforcement."
The dollar is gaining strength against its competitors within 5 days. The dollar index fails to break up to the level of 94, as investors prepare for key events - the ECB meeting, as well as the 3Q GDP in the US.
The focus today is September's durable goods orders and trade balance data.
The Bank of Canada (BoC) will announce its monetary policy decisions at 17:00 Kiev time.
The euro / dollar pair recovered to 1.1607. Europe opened lower on the dollar. The yield on 10-year US bonds fell to 1.62% per annum. The yield has headroom to drop to 1.60%.
The euro is trading below the balance line (sma 55). It now acts as resistance at 1.1613. At 1.1622, one more resistance passes (the upper line of the channel built on the three values 1.1591-1.1585-1.1626). Buyers need to complete the second level. Not to pass, but to close the day above 1.1626.
There is one important point. If data on orders for durable goods turn out to be better than expected, there is a risk of the euro falling to 1.1580. The only report that can change the direction of the euro today, as yesterday changed the data on new home sales in the United States.
Summary: on Tuesday, the euro fell against the dollar against the backdrop of the published strong statistics in the US. Buyers found support around 1.1585. Trading in Europe opened with growth. The current value is 1.1607. Resistances are the levels 1.1613 and 1.1622. Buyers need to close above 1.1626 for the upside move. Their activity is low due to the upcoming ECB meeting.