US July advance retail sales came in at +1.2% versus +2.1% expected
EURUSD turned marginally higher after the headline US retail sales came in lower than expected. The release put the pressure on the dollar despite the details of this report being much stronger than the headline while the revisions were significant. Retail sales ex-autos and gas came in at +1.5% versus +1.0% expected while the prior result was revised from +7.7% from +6.7%.
As a result, the euro has settled marginally above the 1.18 handle but failed to extend the upside momentum as traders keep a cautious tone in general. On the weekly timeframes, the pair is in the green but still off the recent two-year highs above 1.19. As of writing, EURUSD was changing hands around 1.1820, with the daily RSI being directionless, suggesting the bullish impetus remains limited.
The cable jumped to the intraday high of 1.3132 in recent trading amid a weaker dollar following the report out of the US. As a result, the pair turned green on the weekly charts while the daily RSI climbed to the 70 handle but the bullish bias is too modest to bet on further gains in the short term. A daily close above 1.31 will confirm the latest local breakout. On the four-hour timeframes, the technical picture has improved following a break above the 50-SMA that has now turned into support around 1.3085. At the same time, the RSI turned flat in recent trading, which implies further upside could be limited in the immediate term.
USDJPY came under more aggressive pressure in recent trading after setting intraday peaks around 107.00. The pair dipped to the 106.50 area and remains within the range limited by the 100- and 20-DMAs that arrive at 107.20 and 106.10, respectively. As long as the prices stay in this channel, the dynamics in the greenback remains neutral in the short term. On the other hand, the daily RSI has reversed south, suggesting the downside pressure could persist for some time before the pair retargets the 100-daily moving average if the 107.00 barrier gives up eventually. In the weekly charts, USDJPY is finishing the second bullish week in a row.
NZDUSD turned flat on the day after an earlier break to intraday lows around 0.6525. As such, the pair is back flirting with the 50-DMA that arrives at 0.6550. A daily close above this level is needed for a bullish extension but the daily RSI is flat in the neutral territory, suggesting the New Zealand dollar will see some consolidation instead, or could even come under renewed pressure if the dollar shrugs off the retail sales report any time soon. The technical picture on the four-hour timeframes suggests further recovery potential will be limited, with the pair staying well below the key moving averages.
The cross bounced from intraday lows around the psychological level of 0.90 and managed to trim intraday losses marginally since then. However, the euro remains bearish on the intraday basis, suggesting the recovery potential is modest in the near term. On the other hand, the fact that EURGBP managed to hold above a significant 0.90 level may signal its readiness to make a stronger bounce. If so, the immediate upside target will arrive in the form of the 50-DMA around 0.9025. Once this level turns back into support, further recovery should be expected. In the immediate term, however, the pair will likely remain on the defensive.