The euro slowly recovered its positions after the publication of German GDP for the second quarter which reported a growth of 0.3% that was slightly more than estimated in previous days.
While the report is not enough to give driving force to the single currency, it managed to slow the decline the currency demonstrated on Monday during the American session, when a negative day for Wall Street stocks forced many leading currencies to lose positions against the dollar.
The German ZEW index, which shows the financial climate in country, was not of much importance as the reading was lower than expected. The euro halted, at least momentarily, its recovery, but it gets with upward trend for the next hours. To confirm a more sustainable upward move, it is expected to exceed the maximum of Monday at 1.2390; in this case 1.2405 and 1.2440, maximum of the last week, continue to be resistance.
Meanwhile, the pound sterling was heavily favored in the beginning of the European session by the UK inflation report, which registered annual growth of 2.6%. This fact allows revising the Bank of England view of keeping interest rates at 0.5% level. Does it demonstrate low of the entity? We do not think so. But it does give the reason to consider, as Gobernardor King said, that further cut of the interest rate would be counterproductive.
On the other hand, lower oil prices decreased the growth of the Canadian dollar, whose short-term uptrend is in danger. Overcoming 0.9955 / 60 could lead to higher cross of USD / CAD, which could seek parity again during the American session.
Meanwhile, the Australian dollar does not report any significant changes, and we do not expect major movements for the rest of the day. The Aussie stabilized at 1.05, and only a low of 1.0490 could change the course of short-term bullish trend. However, their resistances are more tangible, the most important of which is 1.0615.
A slight drop within the yen against the dollar is giving higher impetus to the GBP / JPY and EUR / JPY pairs. These trends could be extended during the next few hours, especially if the euro is above 1.2370 and the pound is above 1.57.
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