Dollar Strengthens After Retail Sales Report
Dollar strengthens in early US session after much stronger than expected retail sales data.
Headline retail sales unexpectedly rose 1.0% in Nov, much better than expectation of 0.2%. Also, this is the first rise since the headline sales turned negative in Sep. Ex-auto sales also rose by 1.1%, beating consensus of 0.3%, strongest rise since Jan.
Earlier, Sterling was boosted mildly by better than expected employment data which shows unemployment dropped back from 5.6% to 5.5% in Oct. Claimant count also dropped by 5.7K comparing to expectation of 3.5k increase. This is suggesting that even though the labor market in UK remains soft, it’s, at least, not getting worse.
USD/JPY
Daily Pivots: (S1) 116.56; (P) 116.89; (R1) 117.11;
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USD/JPY’s rally from 114.41 resumes in US session and finally breaks through 117.11 cluster resistance (50% retracement of 119.86 to 114.41 at 117.14) and short term falling trend line (now at 117.20). At this point, further rally is expected to follow towards 118.58 resistance as long as USD/JPY stays above 116.65 support. On the downside, below 116.65 will suggest a short term top is formed and should bring pull back to 4 hours 55 EMA (now at 116.17). But further rally is still in favor as long as such pull back in contained by 115.36 resistance turned support.
In the bigger picture, breaking of 117.11 cluster resistance is neutralizing medium term bearishness and suggest the fall from 119.86 is merely a correction of the whole rise from 108.99. Hence, break of 118.58, which will come with sustained trading above multi-year falling trend line (now at 117.81) , will encourage a retest of this year’s high of 119.86.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.
Shing-Ip Tsui is the founder and CEO of
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