Will this mornings release of August Retail Sales data from the US halt this weeks US dollar slide? Maybe not. Headline Retail Sales is forecast at 0.4%, m/m compared to July’s 0.5% rise. Ex-autos is predicted at 0.5%, compared to July’s 0.6% gain. If the data is stronger than expected, the US should recoup some of this week’s losses although the impact may be fleeting. The US economy is booming, so the data is expected to be strong. A weak report would add to the greenback’s losses. However, it is Friday meaning the currency is vulnerable to pre-weekend profit taking moves.
The overnight session didn’t offer up much in the way of excitement. China Retail Sales and Industrial production data were firm which gave AUDUSD and NZDUSD a lift. That move was reversed in Europe.
USDJPY climbed to 112.06 in Asia, underpinned by US 10 year Treasury yields flirting with 3.0%., but drifted down into the New York open.
EURUSD opened flat but is up 1.23% since last Friday’s close. EURUSD is supported by ECB President Draghi’s slightly positive outlook for the Eurozone. However, prices are well below major resistance in the 1.1750 area. Yesterday’s ECB meeting was a non-event.
GBPUSD is the biggest gaining G-10 major currency since last weeks close, rising 1.60%. Yesterday’s Bank of England policy meeting didn’t provide any surprises. GBPUSD gains are on the back of some positive noise about Brexit coming out of the European Union which have squeezed weak short GBPUSD positions.
USDCAD is up 1.23% since last week’s close, bolstered by a somewhat improved tone to the US/Canada trade talks and broad US dollar weakness. The prospect for an announcement of a breakthrough in the next few days is remote. Canada’s Freeland is not even at the negotiating table.
USDCAD Technical Outlook
USDCAD is in a downtrend from September 6 below 1.3130 on a 4 hour charand in an uptrend above 1.2940 from April on a daily chart. Prices will consolidate until a break either side of the range. For today, USDCAD support is at 1.2970 and 1.2940 Resistance is at 1.3020 and 1.3060
Today’s Range 1.2970-1.3060