Retail Sales rebound on US consumer strength.U.S. Dollar Trading (USD) the much anticipated May Retail Sales didn't disappoint coming in much stronger than anticipated at 1.0% vs. 0.5%. Combined with upward revisions in March and April the numbers paint a resilient picture of the US consumer. The Government stimulus package released in late April has filtered through leaving the US Federal Reserve the possibility of a rate hike later in the year. Driving up inflation fears, US import prices for May rose 2.3% on soaring energy costs. Weighing on the Dollar though was the continued weakness in US initial Jobless claims coming in at 384K up 25K from last week. In the US share markets, the NASDAQ was up 10 points (0.4%) and the Dow Jones was up 57 points (0.57%). Crude Oil closed up $0.36 ending the New York session at $136.74 per barrel. Looking ahead we have the May CPI expected to quicken to 0.5% from Aprils 0.2%. June Michigan Consumer Confidence is expected to fall further to 50.5 from 51.1 in May.The Euro (EUR) continued in a downtrend bowing to USD strength but still performing well against other currencies. Solid April Industrial Production of 0.9% and strong reported sovereign bids helped to rebound off lows. Overall the EUR/USD traded with a low of 1.5379 and a high of 1.5566 before closing the day at 1.5420 in the New York session. Looking ahead, German CPI for May forecasted at 0.6%.
The Japanese Yen (JPY) the USD/JPY traded through 108 for first time since February as US interest rates continue to be forecasted higher. Strong US Retail sales broke down option barriers at 107.85 and 108 but reported strong barriers at 108.10 and 108.30 are expected to provide stiff resistance along with exporters taking advantage of the higher levels. Overall the USDJPY traded with a low of 106.91 and a high of 108.08 before closing the day around 107.91 in the New York session.
The Sterling (GBP) traded to its lowest level since May 15th with the Dollar dictating direction. The Bank of England Bulletin showed public expectations of future inflation running way above current projections and action may be needed by the BoE. Overall the GBP/USD traded with a low of 1.9435 and a high of 1.9644 before closing the day at 1.9473 in the New York session.
The Australian Dollar (AUD) was sold heavily after May Unemployment Data came in very weak. Unemployment Change -19.7K vs. 13.5K expected and Unemployment Rate jumped to 4.3% vs. 4.2% forecast. The data resulted in trimming of interest rate expectations and growth expectations. In the US session the large drop in gold took the glimmer off the recent surging Aussie. Overall the AUD/USD traded with a low of .9329 and a high .9488 before closing the day at .9343. Looking Ahead, RBA Stevens speaks today on the state of the economy.
Gold (XAU) fell steeply through supports as US data came in strong and the USD surged. Overall trading with a low of $857 and high of $882 ending the New York session at $868 an ounce.
Technical Commentary
-
Euro - 1.5455
Initial support at 1.5380 (Jun 12 low) followed by 1.5366 (Jun 5 low). Initial resistance is now located 1.5587 (Jun 12 High) at followed by 1.5657 (Jun 10 high). -
Yen - 107.75
Initial support is located at 106.8 (June 12 low) followed by 106.24 (Jun 10 low). Initial resistance is now at 108.08 (Jun 11 high) followed by 108.61 (Feb 14 high). -
Pound - 1.9485
Initial support at 1.9435 (Jun 12 low) followed by 1.9363 (May 14 low). Initial resistance is now at 1.9645 (Jun 12 high) followed by1.9683 (61.8% retracement of the 1.9801 to 1.9493 decline) -
Australian Dollar - 0.9380
Initial support at 0.9304 (50% retracement of the .8953 to 0.9655 advance) followed by 0.9291 (May 15 low). Initial resistance is now at 0.9527 (Jun 10 high) followed by 0.9648 (Jun 9 high). -
Gold - 872
Initial support at 857.65 (Jun 12 low) followed by 850 (Psychological Number). Initial resistance is now at 883 (June 11 high) followed by 895 (Jun 10 high).
We recommend trading forex with Easy-Forex.
