A main theme in the forex market this week was the USD softening after the FOMC. Let’s see how that manifested in the EUR/USD. Today, Strong retail sales and hot inflation data from Canada is boosting the Loonie. Let’s take a look at the USD/CAD.
EUR/USD rallied this week after putting in a price bottom last week. There was broad USD-weakness after the FOMC event risk, and the EUR/USD popped up from the price bottom, only to stalled at 1.3643. As we get into the 6/20 session, we see that traders faded the pair down to a rising trendline. A break below 1.3550 should clear the trendline and the moving averages in the 4H chart. If the RSI also dips below 40, then we could be looking at a bearish continuation signal, refocusing traders on the 1.35 handle and the 1.3476 low on the year. Above 1.3560, the pair remains bullish in the very short-term, with upside toward 1.3676 June high.
USD/CAD is blasting through consolidation support today after very hot inflation and retail sales data from Canada. The CPI in May came in at 0.5% on the month, and 2.3% on the year. This was a pick up from April’s reading and also beat most economists’ forecasts. Retail sales also grew 1.1% in April, faster than the 0.1% in March. Economists had forecast a 0.4% growth.
As both inflation and demand data moved higher and beat estimates, USD/CAD fell below its recent consolidation support at 1.0815. The dip is also breaking below the 200-day SMA. The 1.0737 pivot might provide some short-term support. But as long as price is below 1.09, there is downside risk toward the low on the year near 1.06, and the Dec. 2013 low at 1.0560.
To contact the reporter of this story, email Fan Yang at email@example.com
Previous: Silver (XAG/USD) Signals Bullish Continuation and Exposes the 2014-High