US Retail Sales rose 0.5% in June and US Retail Sales-ex-autos rose 0.4%. The data was close enough to forecasts and managed to put a halt to a US dollar slide.
The US dollar extended Friday’s slide in an uneventful overnight market. The rest of the week may not be as humdrum. The Trump/Putin meeting, China/US trade worries, Fed President Jerome Powell’s Congressional testimony on Wednesday, earnings season on Wall Street, and top-tier economic reports will ensure the pot is well-stirred.
Japan was closed for a National holiday. USDJPY climbed from a low of 112.12 to 112.55, supported by strong US data from last week. The Antipodean currencies traded higher as the US dollar extended losses from Friday.
The European session was uneventful. France was distracted as some soccer fans set fire to Paris. The Eurozone trade balance narrowed to EUR 16.9 billion EURUSD drifted higher rising from 1.1676 to 1.1709. Prices continued higher in early New York trading with EURUSD peaking at 1.1724 before slippinmg to 1.1715 after the Retail Sales report.
Sterling continued to benefit from President Trump’s UK visit. Friday, GBPUSD collapsed when it was reported that Trump trashed UK Prime Minister May’s Brexit plan. The President proclaimed it “Fake News” and praised the UK/US relationship. GBPUSD rallied from the Asia low of 1.3226 to 1.3272 in early New York trading. The rally stalled at 1.3291 in New York, this morning.
Oil prices remain under pressure. Traders are concerned that Saudi Arabia and Russia are producing above quota and Iran is saying that the June Opec deal doesn’t give the Saudi’s to exceed production caps.
USDCAD has been ignored. Prices action is tracking broad US dollar moves. USDCAD is supported by robust economic growth and by expectations for higher US rates. However, Bank of Canada Governor Stephen Poloz’s optimistic economic assessment suggests further BoC rate hikes are on the table, which is providing some support to the currency.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while prices are below 1.3180 looking for a break below 1.3130 to extend losses to the 1.3090-1.3105 zone. A break above 1.3180 would target 1.3250. For today, USDCAD support is at 1.3130 and 1.3090. Resistance is at 1.3180 and 1.3210.
Todays Range 1.3011-1.3190.