The greenback is continuing its rise that started on November 26, after the NFP report, following the U.S. retail sales report released today which beat estimates, causing a tremendous strike for the dollar on signs the world's largest economy is on the right track. The dollar index, a gauge of the dollar's strength against a basket of major currencies, rebounded to a high of 76.69 compared with the day's low at 75.89. The dollar's advance to one month high resulted in a remarkable drop in gold and oil.
With regard to the euro-dollar pair, it is declining sharply on the daily and 4-hour charts after the stellar U.S. report. The pair is now floating in an oversold area, according to the Stochastic Oscillator on the daily charts. This week the euro zone lacks important fundamentals, so moves of the 16-nation currency were merely technical. The pair after breaching the support at 1.4780 is currently at 1.4617 after touching a high of 1.4776 and a low of 1.4597, while it is expected to face the next support at 1.4580 and next resistance will be at 1.4667.
As for the sterling-dollar pair, it is continuing its downside trend that started on November 17 on the daily charts, while also showing a downside signs on the 4-hour and 1-hour charts. The pair is currently close to doing 61.8% Fibonacci retarcement to do a downside correction to the upside trend that started on October 13. So far, the pound is trading at 1.6224 setting a high of 1.6337 and a low of 1.6194; while the coming support for the pair is seen at 1.6190 and the resistance is spotted at 1.6265.
Relative to the dollar-yen pair, it is inclining for the second day on the daily charts retracing two days of decline. The pair breached the strong resistance at 89.42, but it may retest it again. Actually, the rise in the pair reflects the strength of the dollar as a response to the U.S. news. Now, the pair is trading around 89.59 after hitting a high of 89.80 and a low of 88.17, whereas the coming support is at 89.00 and resistance is spotted at 90.15 then 90.52.
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