The very weak Asian stocks yesterday helped the USD to hit intraday highs against most pairs except the other safe havens in the JPY and CHF. US sentiment improved though and stocks were able to finish higher as June House Price Index showed a 4.2%y/y and CB Consumer Confidence increased to 53.5 in August. The risk aversion flows pushed the yen higher the pair tested Y84. The AUD stabilized in Europe before rallying on good US home data and Stocks towards back above 0.8940. July Retail Sales surged 0.7% vs. 0.4% previously. Meanwhile, Euro lows of the day were seen into the European session before a solid rally in EUR/JPY helped lift and then strong US data inspired risk on trades. German Unemployment at -17k in August was roughly as forecast. Elsewhere, Sterling was under pressure for most of the day falling to month lows under 1.5400. EUR/GBP buying and GBP/JPY selling added weight as move end flows impacted the Pound negatively. UK July Lending was weak at 258mn.
EURO: The Euro (1.2705) gave a range bound trading session yesterday moving higher towards 1.2743 levels. Stochastics and the RSI are oversold but remain neutral and can push the pair near the support of 1.26. Resistance comes near 1.2780 levels whereas support continues to be at 1.26. Medium term tone: Neutral to bearish.
GBP: The Pound lowered till 1.5326 levels indicating bearish signal in the currency. Stochaastic and RSI are standing neutral to slight bearish bias in the pair. Resistance comes near 1.5458 (55 daily EMA) Today PMI data which is expected weaker can pressurize further on the pound. Medium term tone: Neutral to bearish.(Spot 1.5390).
JPY: Yen held strong yesterday making the low of 83.81 levels. Resistance comes near 85.23 levels(21 daily EMA) whereas support is seen near 80 levels. Closes below this crossing is needed to confirm that a short-term top has been posted. Outlook for Yen: Bullish Target 80 (Spot 84.34).
AUD: The Aussie gave away its major strength bottoming at 0.8856 levels, however recovered in the US session till 0.90 levels where the crucial resistance is standing. Strong rise in the retail sales data released this morning indicates healthy GDP and can give further boost to the Aussie. Overall Bias remains: Slight bearish (Spot 89.77).
GOLD: Gold($1247) rose yesterday in the US session after the dovish statement from the FED. Next target in gold would be $1262 levels(high of 27 June) thus going long on the lower levels near $1220 - $1230 levels is recommended Medium Term remains- Bullish .
Dollar Index: Dollar index is currently trading at 83.05 levels and edged higher to 83.56 last week but failed to sustain above 83.45 cluster resistance (38.2% retracement of 88.70 to 80.08 at 83.37) and turned sideway. A short term top is formed and some more sideway trading should be seen in near term. Sustained trading above 83.45 will confirm that correction from 88.70 has completed at 80.08 and will target 61.8% retracement at 85.40 at least.