US$ under pressure after weak retail sales

The dollar  is lower again today after another batch of weak economic data, this time the Retail Sales , which rose 0.0% in April versus expectation of 0.3%. Ex-auto sales rose 0.1% versus expectation of 0.4%. The Euro rose to a high of 1.1382 and currently sits not far away, despite the earlier release of the EU GDP, which rose less than expected by 0.4% qq in Q1 comparing to consensus of 0.5%, due mainly to lower than expected growth in Germany, which came in at 0.3% qq (exp 0.5%)

Today should be somewhat quieter given the Ascension Day holiday in Europe, although the US data in the form of the Jobless Claims and the PPI may provide further direction.

The 4 hour charts are pointing higher although there are going to be good sellers ahead of 1.1400 where today’s session high and also, that of 7 May (1.1391) will provide resistance. Beyond 1.1400 would head to 1.1449 (19 Feb high) and then, further out towards 1.1515 (50% of 1.2518/1.0461) and 1.1533 (3 Feb high) and to the major descending trend resistance, currently at around 1.1580.

If the dollar were to turn lower, which seems less likely at present, buyers would come in at 1.1290/00 (minor) and then at the convergence of the 100/200 HMA’s at 1.1215. I don’t really see it getting close to this today but further support would see bids at 1.1185 (23.6% of 1.0520/1.1391) and at minor rising trend support at 1.11560

Economic data highlights will include:

Ascension Day Holiday (EU), US Jobless Claims, PPI.

The dollar is lower again today following the soft Retail Sales but is, so far, holding on above 119.00 (low 119.03)

While the short term charts are pointing lower, the dailies are still flat and thus a neutral stance remains necessary, with the likelihood of more choppy trade in the days to come.

Having closed below the 55/100 DMAs at 119.35/45 and the daily cloud base (119.37) these will now act as strong resistance. If this area is overcome, then a rebound towards 120.00 will be in order, above which, the previous technical points remain in place. Back above 120.00 would open the path to another move to the 120.25/30 and then towards 120.50 – and then eventually to 120.85 (13 Apr high) and 121.00, albeit not today. A topside break of 121.00 would open up the 20 March high at 121.20, the consolidation area at around 121.50 and the 10 March high at 122.02. If/when this level can be overcome, the way would open up for a run towards the 15 July 2007 high at 122.42, and in the longer term, the target of 124.13 (17 June 2007 high) would appear on the horizon but will take time.

Below 119.00 would open a deeper decline towards  118.80 (rising trend support ) and then to 118.50, which should see good bids ahead of the 26 March low (118.32), the Fibo support at 118.20 (61.8% of 115.85/122.02) and 118.00, but below which there is not too much to provide support until 117.30 (76.4%).

Economic data highlights will include:

Foreign Bond/Stocks Investment, Q1 GDP.

The Aud did not hang around for the soft US data to head higher, making it up to 0.8040 in Europe on the back of the generally soft US dollar and firmer commodity prices. The soft US data propelled it further, beyond last week’s peak at 0.8074, to a session high of 0.8123 and looking as though it can now head on towards the weekly Kijun at 0.8160 and then to the next major resistance at 0.8218 (50% of 0.8910/0.7532). Beyond that, further targets would be at 0.8294 (15 Jan high) and the 100 DMA at 0.8325. In the short term, the Fibo resistance at 0.8112 (76.4% of 0.8294/0.7532) will act as resistance.

The downside will now see bids at 0.8100 and then at the previous highs at 0.8074 and at 0.8030. Below this looks unlikely for a while now and it looks as though we are going to need to get used to a 0.8000 handle for a while to come.

Economic data highlights will include:

Home Loans.