Markets Mixed As Investors Wait For Further Clues

The markets were seen trading mixed on Tuesday as equities paused in their rally and gold managed to post some modest gains on the day. With the producer prices index coming out lower than expected, focus turns to today’s inflation report. The consumer price report could be a potential market mover as it could cement expectations on monetary policy. The Fed is due to meet next week and could signal dovish forward guidance.

Euro Unmoved by Sentix Investor Report

The common currency brushed aside weakness in the latest Sentix investor report as the currency remained bullish. The monthly report saw the index falling to -3.3, missing estimates of 2.3. Previously, the index registered a reading of 5.3. Later today, the ECB President Mario Draghi is slated to speak at a scheduled event.

EUR/USD Aiming to Test Last Friday’s Highs

The currency pair has been retracing the modest losses from earlier this week. Price action is seen aiming for Friday’s highs near the 1.1338 level. A close above this high could potentially confirm further upside in price. The next main price level of interest in the currency pair is 1.1400.

EURUSD

 

UK Unemployment Rate Holds Steady

The monthly unemployment report from the UK showed that the rate held steady at 3.8%. Wage growth was also positive, rising 3.1% or about 3.4% without adjusting for inflation on a year over year basis. Economists forecast that wage growth would slow. Revision to previous data saw the wage growth being revised from 3.1% to 3.3%. The sterling managed to post some modest gains on the back of the unemployment report.

GBP/USD Attempts to Breakout From its Range

The currency pair attempted to push to the upside as price managed to recover within the range. GBPUSD is seen once again trading at the top end of the range at 1.2716. As long as price holds this level, we could expect to see further gains in store. The next upside target is seen at 1.2895 where resistance is most likely to form.

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