US DOLLAR STRENGTHENED ON STRONG DATA
Yesterday's US retail sales data showed a boost in sales for the month of November which helped the US dollar post some gains during the US trading session. Data showed that Americans are spending more in this holiday season than expected. On the negative side, initial jobless claims for the week ended on 9 December decreased by 11,000 to an adjusted 225,000 as compared to the expected 235,000. Today is relatively a calm day in respect to data releases.
This morning at 10:00 GMT, the Eurozone trade balance will be released which is expected to hit 24.4 billion as compared to 25.0 billion in the previous month.
Canadian manufacturing sales for the month of November is due out at 13:15 GMT which is expected to increase by 0.9% as compared to 0.5% in the previous month.
The US has a busier schedule compared to other economies as three different data are due to be released today. At 14:15 GMT data for the Empire state manufacturing index is due with a forecast of 18.8 in November, it was 19.4 in the prior month. Industrial production data is expected to decrease to 0.3% from 0.9% in October and Capacity Utilization rate is forecasted to reach 77.2%, from a previous reading of 77%.
EUR/USD keeps trading on the downside while proceeding towards the immediate support at 1.1764 (today's Asian session low so far) and also capped by the descending 20-period moving average, which crossed below the 50-period moving average hence restricting the upside movement. As far as price remains below 1.18619 (yesterday’s high) it is most likely to sink below 1.17640 and 1.7294 (last week’s low).
USD/CAD is under pressure and expected to extend its downside movement. In the Asian session, the pair encountered a steep downward movement which is expected to extend in upcoming sessions as well. Both 50-period and 20-period moving averages are declining and the relative strength index is heading towards the bearish zone. So, as long as price remains below 1.28789 (last week’s high), look for new downward target at 1.2712 (yesterday’s low) and 1.2665 (last month’s low).
GBP/USD is expected to trade with bullish outlook above 1.33671. The pair posted a rebound from the support and still above this key point. The relative strength index is above its neutrality area at 50. Continuation of consolidation cannot be ruled out though its extent should be limited. As long as 1.3367 (yesterday's low) is not surpassed look for targets at 1.13644 (yesterday's high) and 1.3537 (last week’s high).