Monday was a day for catching a breath after the shock that the lira dropped in the markets. Lack of macroeconomic data allowed to focus on Turkey and developing countries. Today, for this we are dealing with a calendar filled with important publications. The global investors have already got familiar with some of the weaker data from China, and now are waiting for Europe to enter the stage.

At 4:00 am China published a portion of macroeconomic data, which in most cases did not meet market expectations. Industrial production in annual terms increased by 6% instead of forecasted 6.3%, ie as much as recently. Retail sales also turned out to be slightly below the market consensus, and they increased by 8.8% year on year (9.1% expected).

The People's Bank of China only slightly weakened the yuan. The reference rate was moved from 6.8629 to 6.8695. The central bank is still talking about the relatively high liquidity of the banking system. The Chinese currency is at the level where it was last May.

On Tuesday, the 14th of August, the event calendar is quite busy in important data releases. The UK will post Claimant Count Change data, Germany will present GDP, CPI and ZEW data, the same with Eurozone. No important date from the US today.

EUR/USD analysis for 14/08/2018:

The German GDP reading for the second quarter fell slightly above the market consensus: 0.5% q/q against expected 0.4%. In annual terms, the increase was 2.3%, instead of the forecasted 2.5 %. As a result, EUR / USD fired 0.1 % up to 1.1410.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has made a new local low at the level of 1.1365 and now is trying to bounce higher. The nearest resistance is seen at the level of 1.1434 and breaks through this resistance would indicate a return to the channel. Please notice the oversold market conditions that support the short-term correction possibility on this market. The key level is still at 1.1509 - 1.1529 zone.