In the middle of the last week, the US dollar ended its rally and turned around. The US dollar index is moving to 92. No important data was released on Monday. But on Tuesday, trading will depend on economic data. Retails sales and core retail sales data will be out at 15:30 MT time. Up to date, the forecast is mixed. If the actual data is greater than the forecast one, the greenback will be able to recover.
A weakness of the US dollar gives chances of recovering to other currencies.
The euro is moving up. Positive news on a progress in a forming of the Italian government, low possibility of Italy’s exit from the European Union and the weak USD are pulling the single currency up. EUR/USD is climbing to the resistance at 1.20. If the pair is able to close above this level, the 200-day MA at 1.2020 will be the next level to break. However, no notable data for the euro will be released on Tuesday, so the strengthening of USD may pull the single currency to the pivot point at 1.19.
Let’s look at the GBP/USD pair. The pound managed to rebound from the 200-day MA and is going up. The pair has reached the resistance at 1.36. No important data is anticipated to be out on Monday. However, Tuesday’s Average Earnings Index (11:30 MT time) will attract investors’ attention. If the actual data is greater than the forecast, and the greenback continues to fall, the pound will be able to move to 1.37. Weaker economic data and stronger USD will pull the pair back to the pivot point at 1.3550.
We are moving to the Canadian dollar. The USD/CAD pair is not showing a significant move. Although on the daily chart of USD/CAD, we see a bearish movement, it is not extensive. The loonie is supported by the advance of oil. However, tomorrow UK, German, French and Iranian foreign ministers will meet to ensure a further deal. If they are able to come to any decision, Middle East’s tensions will weaken and oil will decline. So the Canadian dollar may lose momentum. USD/CAD is within 1.2740-1.28 range. There is a high possibility that the pair will close within the range. Tuesday’s movement will depend on the Iranian deal and the USD’s economic data. Whether tensions will ease and the US dollar will be able to recover, USD/CAD will come to the resistance at 1.28. Otherwise, the support will lie at 1.2740.
Thank you for your attention!
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