Germany’s ZFE – the investor expectation index which measures investors’ confidence in the German economy, fell again in August in spite of the positive sentiment surrounding the Euro zone in general and Greece in particular. ZWE declined since March’s 54.8 to a 29.7 low in July (lowest since November, 2014), and once again in August to a staggering 25.0, marking the fifth consecutive month of confidence loss in Europe’s star economy. The index based on the economic outlook of approximately 350 respondents for the next six months is expected to shift its trend in the near future and advance at 31.9 points by the end of this month. On a more positive side, the CSI (Current Situation Indicator) rose to 65.7 this month, compared to July’s 63.9 and over the forecasted 64.2 points.
The US dollar is gaining points versus its Canadian counterpart, driving the USD/CAD trend line towards the 1.3080-85 area. The pair was also helped by the missed expectations of the Canadian Housing Starts, the seasonally adjusted expanding pace turning up 193.0K despite the estimated 195.0K, estimation reviewed from a previous 202.3K. On the US side, ULC (Unit Labor Costs) rose 0.5% in Q2, while the Nonfarm Productivity turned up 1.3%, over the expected 0.1% for ULC and, respectively, 1.6%for the Nonfarm Productivity.
EUR/USD is currently at a 0.14% gain at 1.1034. For the trend to break loose, technically it would have to break the 1.1089 resistance set by yesterday’s high, continuing with 1.1113 (high of July, 31st) and 1.1129 (high of July, 27th). The other way around, if the trend will shift, the loss will probably persist if the1.0961 support line will be breached (low August, 7th) on the way to August 5th’s 1.0848.
The WTI barrel (considered to be the American benchmark for crude oil prices) has continued its downfall to a new multi-year low around the $43.00 level yesterday – the next support line toward the trend is heading seems to be the $39.44 (low of March, 2009), or by a lucky twist of fate the resistance line at $46.94 (high of August, 3rd) . These levels have not been recorded since 2009 (considered to be the peak of the Economic Crisis). A new hit for the crude came from PBoC (People’s Bank of China) after the decision of reevaluating the Yuan, fueling a substantial slowdown in the Chinese economic sphere and extra “wind” in favor on the USD. The supply glut still remains, even more at the time being with OPEC announcing production hike to three-year high levels last month. Also, Iran declared itself ready to export massive quantities of black gold as soon as restrictions are lifted.
