Canadian dollar jumps on retail sales
|The US dollar continued to trade mixed across the board. Lack of clear fundamentals saw the markets trading mostly subdued.
On the economic front, data included the US initial jobless claims increased 3,000 to a seasonally adjusted 241,000 in the week ended June 17. This was slightly higher than the 240k that was forecast. In Canada, retail sales rose 0.8% on the month in April beating estimates of 0.2%. The stronger than expected retail sales push the Canadian dollar higher, which also got a boost from oil prices which snapped a 3-day losing streak.
Looking ahead, the economic data today will include the flash manufacturing and services PMI from the eurozone. Canada will be reporting the monthly inflation data which is expected to show a 0.2% increase on a month over month basis. In the US flash manufacturing and services PMI numbers will be coming out and the FOMC member, Powell will be speaking.
EURUSD intraday analysis
EURUSD (1.1161): EURUSD slipped lower yesterday, but with price action supported above 1.1129, we can expect the upside bounce to continue. We continue to watch the unfolding head and shoulders patterns currently. The upside in price will see a possibly lower high being formed near 1.1200 region. If we expect a reversal here, EURUSD will form the right shoulder of the head and shoulders pattern. Following this, a break down below 1.1129 which will become the neckline support of the H&S pattern will signal a move to the downside. However, the risks of upside continuation in prices could see EURUSD remaining biased to the upside.
GBPUSD intraday analysis
GBPUSD (1.2697): The British pound was trading subdued yesterday but the price action since earlier today has been bullish. The bias is flat at the moment unless we see a daily close above 1.2688. In this case, GBPUSD could be seen pushing higher towards 1.2800 where resistance could be tested even more firmly. If this scenario plays out, further upside in GBPUSD could be expected with a breakout above 1.2800 likely to push GBPUSD higher towards targeting 1.3000. To the downside, if the current consolidation fails, we can expect the bearish trend to resume with prices falling back to 1.2600 and possibly extending lower to 1.2400.
USDJPY intraday analysis
USDJPY (111.32): USDJPY is consolidating into a bullish flag pattern on the 4-hour chart. An upside breakout above the resistance level of 111.70 is required to confirm this bullish trend. The minimum price objective is towards 112.5 followed by 113.36. To the downside, in the event that USDJPY fails to break out above the 111.70 resistance, we can expect the downside in USDJPY to test support at 110.70 region. This would potentially invalidate the bullish outlook in price and could keep USDJPY range bound and possibly biased for further losses.
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