At first glance, it is extremely surprising that the market did not react in any way to the UK's labor market data. This is despite the fact that the unemployment rate declined from 4.8% to 4.7%, and employment rose by 95 thousand. Moreover, the employment data turned out to be better than forecasts. However, it is worth paying attention to the change in the number of applications for unemployment benefits, which fell by 7.8 thousand, with a forecast of 180.0 thousand. The data on applications for July is extremely important here than the unemployment rate for June and employment in May. At best, the unemployment rate will remain unchanged in the near future if it does not grow at all. It was this fact that leveled all the positive values from the unemployment rate and employment.
Unemployment rate (UK):
Europe's GDP data for the second quarter will also not affect the market in any way, although they should show a change from a decline of -1.3% to an increase of 13.7%. The thing is that this is the second assessment and should only confirm the first one, which has long been taken into account by the market. Therefore, market participants will not see anything new, which means there is no reason to panic.
GDP (Europe):
On the other hand, the US statistics may lead to a noticeable weakening of the US dollar. All because of retail sales, whose growth rate may slow down from 18.0% to 11.5%. However, the annual data themselves are still not informative due to the continuing effect of a low base. So, the monthly data is much more interesting, which should show a decline in retail sales by -0.3%. It turns out that the American economy is actually recovering not as confidently as expected.
Nevertheless, the data on industrial production can mitigate the negative consequences, although its growth rate should slow down from 9.8% to 7.2% in annual terms. But here, it's all about the notorious effect of a low base, since the industry can grow by 0.3% on a monthly basis. In any case, retail sales are much more significant, and they will determine the mood of market participants. Industrial production will only make small adjustments.
Retail Sales (United States):
The EUR/USD pair has a correctional move from the base of 2021. The level of 1.1800 acts as a resistance level, against which the price rebounded. The strongest signal about the continuation of the downward interest may come if the price is kept below the level of 1.1750. Otherwise, the quote may return to the level of 1.1800.
The GBP/USD pair follows within the lateral range of 1.3800/1.3885. A closed cycle will remain in the market until the particular border is broken. In turn, this will lead to the accumulation of trade forces. The best trading strategy is the breakout method.
