US Dollar Is Losing Ground Amid Weak Retail Sales Data

The greenback is losing positions on the background of profit taking by traders after its recent appreciation. Other events that put the USD under pressure were comments by European politicians regarding monetary tightening in the UK and cutting of the asset purchasing program in the Eurozone in 2018. The possibility of a quarter percent interest rate hike in the UK, to bring the rate to 0.50% in November, is just shy of 50% after a hawkish statement by the Bank of England. At the same time, inflation in the Eurozone, according to ECB’s officials is likely to approach the target level of 2.0% and plans to cut quantitative easing in the euro area are likely to be announced at the end of October after the ECB meeting.

The US dollar also took a hit today from weak retail sales that fell 0.2% in August against forecasted growth of 0.1%. The Empire State manufacturing index in September, which declined to 24.4 against the forecasted fall to 18.2, could not change traders’ mood. By the end of the trading session today we may see the typical fixing of positions ahead of the weekend.

The New Zealand dollar demonstrates positive dynamics that was caused by a number of factors, including the growth of Business NZ manufacturing index to 57.9 in August against 55.5 in July and the growth of new loans amount in China to 1090 billion against the expected increase to only 933 billion in August. Keep in mind that China is the key trade partner for New Zealand.  


The EUR/USD accelerated the upward dynamics after it was able to overcome resistance at 1.1925. Now the price is close to 1.2000 and its breaking may open the way for continued increases up to 1.2070 and 1.2200. The RSI on the15-minute chart is in the overbought zone that may be judged as a reason for a descending correction soon.


The GBP/USD is soaring after it left the limits of the rising channel. Currently the quotes are consolidating under the important 1.3600 mark, and breaking through that may become a trigger for a continued increase to 1.3800. In case of a rollback, quotes may return to SMA100 on the 15-minute chart or the support lines at 1.3500 and 1.3400.


Within the rising impulse, the quotes of NZD/USD reached the inclined resistance line and horizontal obstacle at 0.7300. Approaching this level, and the RSI on the 15-minute chart being near the overbought area, increases the chances of a pullback of NZD/USD happening soon with the first goals at 0.7250 and 0.7200.


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