The Euro recorded its fourth consecutive session of gains to hit a one-week high as the Dollar weakened, supporting the single European currency. The deterioration of the Dollar levels came despite a higher-than-expected rise in US Inflation, which was supposed to support the Dollar, but a drop in Retail Sales resulted in a decline for the Dollar giving back its gains.
Technically, a rebound would reinforce the previous bullish trend. The pair’s success in breaching the near resistance levels at 1.2470 will enhance optimism and push the price test to 1.2525 levels. A return of prices below the 1.2410 resistance level will temporarily alleviate the bias
The Australian Dollar rose Thursday to its highest level in a week against the US Dollar, following Dollar’s decline and strong Jobs Data report from Australia. The change in Employment for the month of January rose to the value of 33.5 thousand as opposed to expectations of 15.3 thousand jobs. While the unemployment rate fell to 5.5% to meet expectations, Australia’s unemployment rate is a new indication of the Bank of Australia’s Monetary Policy’ relevance to the current Australian economy, which also supports the Australian Dollar’s strength despite the recent decision by the Central Bank to stabilize Interest Rates and Monetary Policy.
Technical reading however shows that despite the recent gains witnessed by the AUDUSD pair, prices still have to break and stabilize above the resistance levels at 0.7945 in order to confirm a continued uptrend. A drop below the close support at 0.7900 would affect the recent uptrend and introduce a sideways trend.
The Dollar fell against the major currencies pushing the Yen higher for gains. The JPY’s strong rise came despite the December Industrial Machinery Orders decline of 11.9%. Record highs hit the highest levels in Asian trading on Thursday since 15 months.
The technical reading of the USDJPY’s negative movement, shows a clear control of the sellers on the price movement, which is expected to return to 106.20. A break below these levels will consolidate the declines and likely cause a test at the levels of 105.60. The return of prices above the resistance level at 106.80 would temporarily ease selling pressure.
The Sterling witnessed a strong fourth straight session in Asian trading on Thursday as the Dollar weakened against a basket of major currencies. Despite these rallies, prices still have to break above stability levels at 1.4020 and 1.4060 to confirm a continued uptrend.
A drop below the close support at 1.3980 would affect the recent uptrend and introduce a sideways trend.
Gold advanced during the Asian session on Thursday, as demand for the precious metal rallied after the Dollar drop, as well as rising demand for safe haven assets in the financial markets.
The US Dollar fell following the US Inflation Data as well as higher yields on US Bonds, which foreshadowed further Fed rate hikes.
Technically, on the short term, we are still waiting for a definite breach in the pivotal resistance of 1355 to confirm a return to the main bullish trend and then for the yellow metal to achieve positive targets starting at 1365. A break of the support level at 1342 will push the price back to the downside correction track.