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Latest data indicates that the US economy continues to recover, with which the pace this August intensified due to improvements in many sectors even amid the COVID-19 pandemic.
Not surprisingly, the main driver of growth was the sharp rise in demand. Many interviewed respondents said they are optimistic about the future, although they expressed concern about the continuation of the pandemic.
Nonetheless, the US dollar rose significantly due to the data, so most likely, the EUR / USD rate will trade around a price value of 1.1815. Reaching this level will lead to a larger upward correction and return to the resistance area of 1.1880, where the upper limit of the new downward channel lies currently. But if the bears turn out to be stronger, then the quote will certainly descend to the support level of 1.1760, a breakout of which will lead to a further price decrease to the lows of 1.1710 and 1.1650.
As for macroeconomic reports, business activity in the US private sector increased in August 2020, according to IHS Markit, with the preliminary report indicating that the composite PMI in August reached 54.7 points against 50.3 points in July. This suggests that activity increased in the sector, as index values above 50 means such.
For the service sector, PMI jumped to 54.8 points in August, so much better than the expected value of economists (51.0 points). The growth was mainly due to the increased demand for services and high marketing activity.
As for the PMI for the manufacturing sector, an increase to 53.6 points was recorded, higher than the forecasted 51.5 points. The report also said that many companies have increased their hiring and remain optimistic about the future of production, however, a lot will depend on what happens next with the coronavirus pandemic.
Sales in the secondary housing market also rose significantly this July, exceeding the forecasts of economists. According to the National Association of Realtors, sales increased by 24.7% to 5.86 million homes per year last month, much higher than the expected growth of 14.2%.
Unfortunately, relations with other countries, such as China, continue to deteriorate. Last Friday, US President Donald Trump said that the United States may at some point stop doing business with China altogether, as in his opinion, China is making a profit at the expense of the United States, while the US has not received anything in return.
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