Markets have muted response to Yellen’s testimony before the Senate that has nothing new while awaited two major economic data today, including U.S. retail sales and core CPI in June.
Non-U.S. currencies traded mixed, with Aussie outperforming and breaking up to a new high from 30, June.
Gold still has not broken above its H4-period EMA60, ending rally of this week right now.
FED chair Janet Yellen returned to Capitol Hill Thursday, 13, July for a second day of testimony, this time before the Senate Banking Committee. The Dollar Index remained choppy as Yellen’s remarks have nothing new. The dollar bounced off a new weekly low before rejected by a H4-period descending trend line. As far as non-U.S. currencies were concerned, they traded mixed, with Aussie outperforming and breaking up to a new high from 30, June. We will have major U.S. economic data tonight, including U.S. retail sales and core CPI in June. Keep an eye on the two reports as the worse-than-expected previous readings caused U.S. dollar to slip while helped to lift gold.
Technical
The Dollar Index (DXY) remained choppy, with a flatten sloping short-term moving averages curve after moving towards each other below its long-term moving averages which continued their diverging state with bearish bias on its H4 chart. Tonight’s important reports could determine the direction. Its support stands at 95.19 and resistance rests at H4-period EMA60.
As far as non-U.S. currencies were concerned, euro saw a lower high after it failed to maintain its rally. The single currency formed a triangle pattern in New York session, potentially tested its 4 hour-period EMA60 again. The sterling rebounded to a 61.8% Fibonnacci level of the decline from 30, June high to 12, July low before consolidating its gains with upside resistance at 1.3028. Watch its downside support at 1.2860. The commodity-link currency Aussie dollar broke above a 30, June high, within striking distance of a yearly high. Be aware of a corrective movement in the short term.
Now focus on precious metals. Gold’s short-term rally was interrupted as it turned lower after hitting a resistance. Gold ended rally this week and instead started a downtrend as its declining sloping short-term moving averages curve, with bearish bias, moved across and traded below its long-term moving averages. Its long term moving averages were dragged down by its short term moving averages after converging quickly. Keep an eye on impacts from U.S. data tonight.
