Summary:
1.The dollar rebounded in the short term following U.S. retail sales release for November which increased 0.8% MoM, higher than the consensus forecast of 0.3%.
2.As one of the biggest victims of a cloud of suspicion over tax reform in U.S., Wall Street declined as the three major indices turned lower after opening higher, with grim short-term prospect.
The dollar rebounded on Thursday 14 December following U.S. retail sales release for November which grew by 0.8% MoM, higher than the consensus forecast of 0.3%. In addition, the three major central banks including ECB, BOE and SNB, all decided to leave their interest rates unchanged. However, the dollar gave up some of gains while U.S. equities bore the brunt of a cloud of suspicion concerning to tax reform as the three major indices turned lower after opening higher, with gloomy short-term prospect. It was reported that two congressmen disagreed with the tax reform bill.
Technical
The dollar index (DXY) staged a corrective rally. Having converged, its short term moving averages tended to overlap with its long term moving averages which contracted further to flatten on the 4 hour chart. Lack of more positive news from tax reform, the index could potentially turn lower again on the day.
As to non-U.S. dollars, the euro dropped to the 61.8% Fibonacci level of the prior upleg in the choppy New York session after significantly waned in the upside momentum in London session yesterday. The British pound closed slightly lower with potentially short-term supports at its long term moving averages on the 1 hour chart. The Aussie dollar may inevitably see short-term profit-taking today as it is highly likely to correct after extending four-day winning streak.
Take a look at precious metals now. The gold went up and down frequently in choppy Thursday trading as it staged a minor corrective decline of the swift upleg on Wednesday. The yellow metal trapped in a range with lower limit at H1-period moving averages and upper limit at H4-period EMA60. Look for short-term direction of potential breakouts.
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.