US Retail Sales Boost Dollar
Retail sales figures released today helped to boost the dollar against the euro and yen. The data release showed better than expected retail sales during the month of May.
Data showed an increase of one percent in retail sales during May, whilst analysts were expecting a rise of of 0.5 percent for the month.
The dollar appreciated by one percent to $1.5396 during early New York trading, with a 2.4 percent rise against the euro so far this week.
The dollars gains offset the euro rise last week which came off the back of comments by European Central Bank chairman Jean-Claude Trichet who suggested that a euro benchmark rate rise of 0.25 percent would be likely in July.
Technical Chart: EURUSD 1-hour
The 1-hour chart shows us progress for the EURUSD over the past few days. The Fibonacci lines show that the EURUSD retraced past the 23.6% line, towards the 38.2% line, before continuing on its downward trend which we have continued to see today.
The US May retail sales figure bolstered the USD pushing the chart down further in favour of the dollar. A look at the support and resistance lines shows we have a downward channel which is tightening. The red line marking $1.5364 shows recent euro lows whilst the upper red line @ $1.5620 shows an area of resistance over previous weeks.
With the tightening channel and the small area for manoeuvre within recent resistance and euro lows we will look for a break-out - which may not be seen today. A break above $1.5489 may give us a chance to take a long position (also taking into account the stochastic on the 4-hour chart is in oversold territory, whilst the daily chart stochastic is near the oversold 20 line).
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