All Eyes On US Indicators Today

Risk aversion in the marketplace, following disappointing eurozone industrial data, resulted in gains for the safe-haven US dollar against its higher-yielding currency rivals yesterday. Meanwhile, speculations of additional monetary easing in Japan sent the yen to a fresh 2 ½ year low against the USD and a 20-month low vs. the euro.

Today, traders will want to pay attention to a batch of potentially significant US news. Specifically, the Retail Sales, Core Retail Sales and PPI figures, all scheduled to be released at 13:30 GMT, could lead to additional gains for the greenback if they come in above expectations.

Economic News

USD - US Retail Sales Data Set to Generate Dollar Volatility
The US dollar turned bullish against several of its higher-yielding currency rivals yesterday, after the release of worse than expected eurozone industrial production data led to risk aversion among investors. The GBP/USD fell more than 100 pips during the European session, eventually trading as low as 1.6031, before bouncing back to the 1.6045 level. Against the Swiss franc, the dollar advanced more than 70 pips during mid-day trading to reach as high 0.9198, before a slight downward correction brought prices down to 0.9189.

Today, investors will be paying close attention to the US Retail Sales and Core Retail Sales figures, set to be released at 13:30 GMT. If either of the indicators comes in above their forecasted levels, the greenback could extend its recent upward trend during afternoon trading. Additionally, the US PPI figure has the potential to generate volatility for the dollar. Analysts are predicting that the indicator will come in at -0.1%, which would represent a modest improvement over last month's -0.8% and could result in additional gains for the USD.

EUR - Euro Reverses Gains vs. Safe-Haven Rivals
After hitting an 11-month high vs. the USD and a 20-month high against the JPY during overnight trading, the euro turned bearish following disappointing EU industrial production news. The EUR/USD lost more than 40 pips during mid-day trading, eventually reaching as low as 1.3335 before bouncing back to the 1.3345 level. The EUR/JPY began falling during the early morning session, eventually losing more than 100 pips to reach the 119.00 level by the end of European trading.

A lack of significant eurozone news scheduled for today means that any price shifts the euro sees are likely to come as a result of British and US news. A speech from Bank of England Governor King, at 10:00 GMT, could lead to risk taking in the marketplace, which would benefit the euro if he signals any improvements in the British economy. That being said, if any of the US indicators being released today come in above their forecasted levels, the euro could extend its losses against the dollar.

Gold - Gold Sees Minor Bullish Movement amid Japan Speculations
Speculations that the Bank of Japan will initiate a new round of monetary easing led to bullish movement for gold during overnight and morning trading. That being said, after gaining close to $14 an ounce to trade as high as $1674.64, the precious metal once again began falling and by the end of the European session prices stabilized around the $1666.00 level.

Today, gold traders will want to note the impact a batch of US news has on dollar pairs. If the greenback sees bullish movement against its higher-yielding currency rivals, gold is likely to become more expensive for international buyers, which would weaken demand and lead to a drop in prices.

Crude Oil - Crude Oil Comes Off 3-Month High
After coming within reach of a recent three-month high during early morning trading, crude oil prices began falling following disappointing eurozone data which led to risk aversion in the marketplace. The commodity fell close to $1.20 a barrel during mid-day trading, eventually reaching as low as $92.93.

Today, US news may be able to help crude oil recover some of yesterday's losses. Should the Retail Sales, Core Retail Sales or PPI figures come in above their forecasted levels, speculations that an improved US economy will lead to higher demand for oil could lead to bullish movement for the commodity.

Technical News

EUR/USD
A bearish cross has recently formed on the weekly chart's Slow Stochastic, indicating that a downward correction could occur in the coming days. This theory is supported by the Williams Percent Range on the same chart, which is currently in overbought territory. Opening short positions may be the smart choice for this pair.

GBP/USD
While the Bollinger Bands on the weekly chart are narrowing, indicating that a shift in price could occur in the near future, most other long-term technical indicators are in neutral territory. Traders may want to take a wait and see approach for this pair, as a clearer picture is likely to present itself soon.

USD/JPY
The Relative Strength Index on the weekly chart is in overbought territory, indicating that a downward correction may occur in the coming days. Furthermore, a bearish cross has formed on the same chart's Slow Stochastic. Traders may want to open short positions for this pair.

USD/CHF
The Bollinger Bands on the weekly chart are narrowing, indicating that a price shift is likely to occur in the near future. Additionally, the Williams Percent Rang on the same chart has dropped into oversold territory, signaling that the price shift could be bullish. Opening long positions may be the smart choice for this pair.

The Wild Card

CAD/JPY
The Relative Strength Index on the daily chart is in overbought territory, indicating that bearish movement could occur in the near future. This theory is supported by the Slow Stochastic on the same chart, which has formed a bearish cross. Forex traders may want to open short positions for this pair today.