The March retails sales report in the US surprised to the upside with a 9.8% increase. Analysts at Wells Fargo point out March started out with retailers still under pressure from February's deep freeze which put a chill on spending activity; but consumers hit stores in March with a pocketful of money and eager to make up for the lost time.
The USD/MXN is falling sharply on Thruways. The decline accelerated after breaking under the 20.00 area. It bottomed so far at 19.89, the lowest level since mid-February. The pair is testing the support at 19.90, and a firm break lower would see the lowest leave since late January.
The outlook continues to favor more losses, with the next target seen at 19.70/75. A recovery back above 20.00 would alleviate the bearish pressure. Above, the next resistance stands at 20.30.
Technical indicators show there is still room for more losses. The RSI is not yet at extreme levels, and neither Momentum. Below 19.70, the YTD low at 19.55 would be exposed.
Gold has been on a roll – benefitting from the drop in returns on US government debt. The yieldless precious metal had been pressured amid competition from safe assets and can now shine again. Returns on the benchmark ten-year bonds dropped below the critical 1.60% and XAU/USD topped $1,760.
How is gold positioned on the technical charts?
The Technical Confluences Detector is showing that XAU/USD has little resistance on the way up, with the next high target being $1,779, which where the Pivot Point one-week Resistance 2 hits the price.
Initial support awaits at $1,763, which is the confluence of the Bollinger Band one-day Upper, the BB 15min-Upper, the PP one-day R3 and others.
It is followed by $1,760, which is the meeting point of the previous monthly high, the Simple Moving Average 5-15m and the PP one-week R1.
Further down, the next...
The NZD/USD pair rose to its highest level in nearly four weeks at 0.7181 during the European trading hours on Thursday and staged a technical correction before regaining its traction. As of writing, the pair was up 0.45% on the day at 0.7170.
- Gold extended its daily rally beyond $1,760 on Thursday. 10-year US Treasury bond yield is down more than 4% on the day. US Dollar Index falls into the negative territory below 91.60.
“Investors opted to fade the strong headlines in Australia's March employment reading amid a quibble with the full-time/part-time split. From our perspective, we are not particularly concerned by the FT/PT split. We'll need to see what happens with the JobKeeper unwind, but we would not be surprised to see some portion of those PT hires converted into FT roles in the months ahead.”
“This week's clear push above resistance at 0.7677 in AUD/USD opens the door to some further upside, we think. We see 0.7750 as the next minor target to the upside ahead of the mid-March highs at 0.7849.”
“The technical backdrop is fairly congested at current levels and the pair may have a lot of wood to chop to advance above the late-February high above 0.80.”
Major equity indexes in the US started the day decisively higher on Thursday with the upbeat macroeconomic data releases providing a boost to risk sentiment. As of writing, the S&P 500 Index was trading at a new record high of 4,152, rising 0.66% on the day, the Dow Jones Industrial Average was up 0.65% at 33,953 and the Nasdaq Composite was rising 1.25% at 13,974.
Earlier in the day, the data published by the US Census Bureau revealed that Retail Sales in March rose by 9.8%, compared to analysts' estimate for an increase of 5.9%. Furthermore, the Initial Jobless Claims dropped to its lowest level in a year at 576,000 in the week ending April 10.
Reflecting the positive impact of these figures on market mood, the risk-sensitive Technology Index is up 1.35% after the opening bell. On the other hand, the Financials Index is down 0.73% pressured by a 3% decline in the 10-year US Treasury bond yield.
- USD/CAD witnessed some follow-through selling for the third consecutive session on Thursday. A modest USD rebound, a pullback in crude oil prices helped limit the downside, at least for now. Upbeat US macro releases failed to impress bullish traders or provide any meaningful impetus.
After bottoming out in the 91.50 region, or new 4-week lows, the index now manages to pick up some upside impulse amidst the broad-based consolidative mood and lower yields, all despite recent solid US data results.
In fact, yields of the US 10-year note slipped back below the 1.60% level on Thursday in spite of better-than-expected results from key US fundamentals.
That said, the buck failed to gather steam after advanced headline Retail Sales expanded 9.8% MoM in March, while Core sales rose 8.4%. in addition, weekly Claims rose by 576K – the lowest level in a year – and the Philly Fed rose to 50.2 for the current month. Same path followed the NY Empite State index, improving to 26.3 in the same period.
On the not-so-bright side, both Industrial and Manufacturing Production expanded below estimates at a monthly 1.4% and 2.7%, respectively, during last month.
Later in the NA session, Busine Inventories, the NAHB Index and TIC Flows will...
After touching its highest level in more than three weeks at 0.7762 on Thursday, the AUD/USD pair seems to have gone into a consolidation phase around 0.7750 despite strong macroeconomic data releases from the US. As of writing, the pair was up 0.4% on the day at 0.7752.
“Germany published March inflation figures. The annual Consumer Price Index matched the expected 1.7% YoY.”
“As for US data, March Retail Sales sharply recovered, printing at 9.8%, much better than the 6.3% anticipated. Initial Jobless Claims contracted to 683K in the week ended April 9, also beating expectations, while the Philadelphia Fed Manufacturing Survey came in at 50.2 in April. The country will later publish March Industrial Production and Capacity Utilization.”
“The EUR/USD pair retains its near-term bullish stance, as it consolidates at the upper end of its monthly range.”
“A corrective decline could come on a break below the 1.1940 support, while bulls will retake the lead on a break above 1.2010.”
Industrial Production in the United States expanded by 1.4% on a monthly basis in March, the US Federal Reserve reported on Thursday. This reading followed February's contraction of 2.6% and came in weaker than the market expectation for an increase of 2.8%.
- German inflation was confirmed at 1.7% YoY in March, matching the preliminary estimate. US Retail Sales jumped to 9.8% in March, beating the market’s expectations. EUR/USD retreating just modestly from near 1.2000, still bullish.
- A combination of factors allowed USD/CHF to gain traction for the second straight day. The prevalent risk-on mood undermined the safe-haven CHF and remained supportive. A modest USD rebound from multi-week lows provided any additional boost to the pair. Mostly upbeat US macro releases did little to impress bulls or provide any fresh impetus.
After the GBP the USD is the second-worst performing G10 currency in the month to date. Economists at Rabobank expect choppy trading conditions for the USD and forecast EUR/USD and USD/JPY moving between a 1.17-20 and 108-100 range respectively.
The Federal Reserve Bank of Philadelphia reported on Thursday that the headline Manufacturing Activity Index of the Manufacturing Business Outlook Survey imor?oved to 50.2 in April from 44.5 in March. This reading beat the market expectation of 42 by a wide margin.
Further details of the publication showed that the Prices Paid Index edged lower to 69.1 from 72.6, the Employment Index rose to 30.8 from 27.4 and the Six-month Business Conditions Index climbed to 66.6 from 59.1.
USD/JPY has been on the defensive since Monday and continues to track the downtrend in US yields, particularly the 10-year benchmark, which puts the key 1.60% level to the test so far in the second half of the week.
In fact, spot has been trading on a negative fashion as investors’ sentiment steers away from the US economy outperformance narrative and looks to the progress of the economic revery in the Old Continent.
In the meantime, yields and the buck remain unable to gather fresh buying interest despite stellar figures from the US calendar on Thursday: Initial Claims rose by 576K WoW during last week, headline Retail Sales expanded at a monthly 9.8% in March and Core Sales rose 8.4% MoM.
Further upbeat data showed the Philly Fed Manufacturing Index improving to 50.2 for the current month and the NY Empire State Index bettering to 26.30 in the same period.
Later in the session, US Industrial/Manufacturing Production is due followed by the NAHB...
- US Retail Sales have surged by 9.8% in March, smashing estimates. Pressure on the dollar following tame inflation figures may be coming to an end. The stock market rally may also be reaching a turning point.
- GBP/USD gained positive traction for the fourth consecutive session on Thursday. A modest USD rebound from multi-week lows capped the upside for the major. Mostly upbeat US economic releases did little to provide any meaningful impetus.
There were 576,000 initial claims for unemployment benefits in the US during the week ending April 10, the data published by the US Department of Labor (DOL) revealed on Thursday. This was the lowest reading in one year and followed the previous print of 769,000 (revised from 744,000) while coming in better than the market expectation of 700,000.
Bitcoin price shows a correction in play after the MRI flashed a red ‘one’ cycle top signal. Ethereum shows a strong trend continuation while the rest of the market experiences a minor pullback.
- USD/CAD remained under some selling pressure for the third consecutive session on Thursday. Sustained breakthrough a trading range support near the 1.2500 mark favours bearish traders. Weakness below the 1.2475 region will set the stage for an extension of the depreciating move.
In a statement published on Thursday, the White House announced that the US will be issuing sanction on Russia in response to Moscow's election interference, activities targeting dissidents and malicious cyber activities, as reported by Reuters.
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