Majors stuck in tight range
Majors still stuck in tight range after some surprise from US and UK economic data. Dollar dipped lower in early US session after lower than expected consumer inflation data which shows headline CPI dropping for the second straight month by 0.5%, more than expected 0.3% drop. Core CPI increased 0.1% only, also, below expectation of 0.2% rise. On the other hand, Sep capital net flows also came in at 65.1B, lower than expectation of 75.0B. Industrial production increased 0.2% in Oct, also below expectation of 0.3%. But after all, dollar remains steady in tight range as traders look forward to Philly Fed index.
Earlier today, Nov retail sales surprising rose 0.9% , largest rise in one year and much above expectation of 0.3%. However, Sterling was not supported much from this piece of solid economic data. Yen was pressured against Euro earlier today after BoJ Governor Fukui sounded neutral on interest rates, dampening chance of a near term rate hike.
USD/CHF
Daily Pivots: (S1) 1.2417; (P) 1.2468; (R1) 1.2506; More.
As discussed before, USD/CHF’s rebound was limited by 1.2523 and reached 1.2521 only before turning sideway. Subsequent retreat suggest an intraday high is formed there already. But a break below 1.2432 support is needed to indicate the rebound from 1.2344 has completed. Otherwise, as long as USD/CHF stays above 1.2432 support, further rise cannot be ruled out.
In the bigger picture, USD/CHF’s medium term rebound from 1.1919 should have completed after meeting upside target of 61.8% retracement of 1.3283 to 1.1919 at 1.2762 and hence deeper decline is in favor to follow towards key support 1.2182. Firm break below 1.2182 will argue that year long down trend from 1.3283 has possibly resumed with a test of 1.1919 low to follow first. However, sustained trading above 1.2523 resistance will argue that the break of the channel line was a false break and put focus back to 1.2768 high.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.
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