USD remains soft and about to close the week in the reds

The Greenback remained soft yesterday as the USD index retreated once again and is about to end the week in the reds, marking maybe its biggest loss in the past eight months, yet today we still have high impact financial releases which could move the USD. We make a start with the US retail sales growth rate for December. The rate is forecasted to slowdown and reach 0.0% mom, if compared to November’s 0.3% mom. Should the rate slowdown as forecasted, we may see bearish tendencies starting to build once again for the USD as it would imply that the average US consumer was less able and/or willing to spend in the US economy. Later we note the release of the industrial production growth rate for December, and the rate is forecasted to slow down and if so, could add additional bearish tendencies for the USD as it would imply a slowdown in the expansion of economic activity in the US industrial sector.

Last but not least for the US we also note the release of the preliminary US University of Michigan Consumer sentiment, which could blow another hit to US consuming as its reading is expected to drop if compared to Decembers’ final reading, implying that the average US consumer is less optimistic for the outlook of the US economy that could prevent him/her from spending more in the US economy for the coming months. On the monetary front from the US, we note the planned speeches of Philadelphia Fed President Harker and NY Fed President Williams in the American session tomorrow. Before that though we would also note the release of UK’s GDP rates and manufacturing output growth rates, both being for November and should the rates accelerate we may see the pound getting some support.

The Aussie on the other hand remained relatively stable against the USD and news from China this morning were not so encouraging as despite the rise of China’s trade surplus the import growth rate slowed down considerably. On Monday’s Asian session Aussie traders are to have an early start as we note the release of China’s GDP rate for Q4 and the industrial output growth rate for December. Should the rates accelerate, we may see the Aussie getting some support as it could imply that Australian exports of raw material could increase as the highly manufacturing Chinese economy grew at a faster pace, while we also note China’s retail sales and the Urban investment growth rates, both for December.

USD/JPY reflected USD’s weakening by breaking just below the 113.70 (R1) support line, now turned to resistance during today’s Asian session. We tend to maintain a bearish outlook for the pair given also that the RSI indicator below our 4-hour chart is below the reading of 30, confirming the intense bearish sentiment, yet at the same time may imply that the pair may have reached oversold levels and is ripe for a correction higher. Should the bears maintain control over the pair we may see it aiming if not reaching the 112.70 (S1) support line. Should a correction higher be performed by the pair’s price action, we may see it breaking the 113.70 (R1) resistance line and aim if not reach the 114.45 (R2) level.

AUD/USD failed to capitalise on the gains made in the European session yesterday and landed below the 0.7290 (R1) resistance line. We tend to maintain a bias for a sideways motion yet the pair’s price action could turn to either direction. It should be noted that the pair’s RSI indicator below our 4-hour chart is above the reading of 50 implying an advantage for the bulls. Should the pair actually be supported, we may see it breaking the 0.7290 (R1) resistance line and aim for the 0.7365 (R2) level. Should on the other hand, a selling interest be displayed for the pair we may see AUD/USD aiming if not breaking the 0.7230 (S1) support line.

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Besides the releases mentioned we also note France’s and Sweden’s inflation metrics or December as well as Japan’s November Machinery orders, while on the monetary front we note ECB President Lagarde’s speech.

AUD/USD 4時間チャート