Daily Forex Technical Analysis – Jan 11, 2018

The dollar was in a bit of a weak spot due to reports that China plans on trimming its Treasury holdings. US equities also capped off their positive streak as fresh concerns on NAFTA emerged and medium-tier reports such as import prices and wholesale inventories disappointed. Initial jobless claims and PPI figures are due today, providing clues on how Friday’s CPI readings might turn out.
The euro was mostly weaker after France reported a larger 0.5% drop in industrial production versus the estimated 0.4% dip. There were no other reports to support the shared currency then, so it was dragged down by weaker European equities. Italian retail sales and the region’s industrial production numbers are lined up today, but the ECB minutes could be a bigger catalyst for euro action.
The pound had a mixed run as it appeared to react to currency-specific factors. UK manufacturing production was slightly better than expected at 0.4% versus 0.3% while industrial production came in line with expectations. The goods trade balance had a wider deficit of 12.2 billion GBP versus the expected 10.9 billion GBP shortfall while the earlier figure was downgraded.
The franc was able to take advantage of the risk-off vibes stemming from reports that China could trim its holdings of US bonds. There were no reports out of Switzerland and none are due today, so market sentiment could keep pushing franc pairs around.
The yen was the main beneficiary of risk-off flows after China hinted that it could reduce its holdings of US Treasuries. This comes after the BOJ’s reduction of JGB purchases, which many interpreted as a taper signal. Japanese leading indicators is due next and an improvement is eyed.
Commodity Currencies (AUD, NZD, CAD)
The Loonie was the weakest of the bunch as Canadian government officials worried that Trump could pull the US out of NAFTA in the next round of talks. Canadian building permits also disappointed with a 7.7% slide versus the estimated 0.7% drop. Australia reported stronger than expected retail sales growth of 1.2% versus the estimated 0.4% uptick.
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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.