Summary:
- The dollar evolved in a consolidative mode against a basket of currencies following the mixed US retail sales and PPI for February.
- We should keep an eye on SNB’s rate decision at its March meeting today and its implications for the Swissie.
The dollar encountered ups and downs on Wednesday 14 March following some US data release last night. The US February retail sales for February came in at -0.1%, somewhere between its previous reading and the consensus forecasts. The second month of negative growth in the sales indicated a slow-down in the US economy in the first quarter. Also on the day, US published its February PPI and which showed the price increased by 0.2% MoM, stronger than the consensus forecasts while rose by 2.8% on the yearly basis, bang in line with the expectations though higher than the previous reading. We should keep an eye on SNB’s rate decision at its March meeting today and its implications for the Swissie.
Technical
The dollar index (DXY) resumed its decline after a rally failed to sustain itself. Its short term moving averages could continue to descend while its long term moving averages drifted into bearish and divergent on the 4 hour chart. Whether or not the dollar’s weekly low and last week’s low could be surpassed will be important to observe.
As to non-USD currencies, the euro inched higher again after finding support at its H4-period EMA40 in a corrective decline phase, targeting its highs of this week and last week. The British pound dropped in a corrective mode with significant support at circa its H1-period EMA60. We should pay close attention to the strength in its rally once it does materialize on the day. The Aussie dollar pulled back below its resistance at circa 0.7892 after the commodity currency cleared the hurdle. Watch for a potential change in its short-term direction.
Switching gears to the precious metals now, the gold whipsawed around 1329 after the yellow metal held below it. Its short term moving averages turned higher and divergent again above its long term moving averages and distanced them. Whether or not the metal could rally further and break above 1329 on the day will be important to watch.
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.