Investors Lock Gaze on US Retails Sales, UK CPIs Due Out Early Tomorrow

US Retail Sales Today and UK CPIs Early Tomorrow the Main Items on the Agenda

The US dollar traded higher against all but one of the other major currencies on Monday and during the Asian morning Tuesday. It lost some ground only versus CAD, while the main losers were EUR and CHF.

EUR/USD — Technical Outlook

EUR/USD fell sharply yesterday, after it hit resistance at 1.1465, with the fall finding support at 1.1357. Overall, the pair remains well below the downside resistance line taken from the high of May 25th, which combined with the latest steep fall, paints a very negative picture.

GBP/CHF — Technical Outlook

GBP/CHF traded higher on Monday, to touch the upper bound of a sideways range that’s been in place since November 4th. That upper bound is at 1.2423, while the lower one is at 1.2280. We can also say that the sideways activity looks like a double bottom formation, but we will start examining a bullish reversal upon a break above 1.2423. For now, we will stay neutral.

As for the Rest of Today’s Events

During the Asian morning, we already got the minutes of the latest RBA monetary policy meeting, which just confirmed that there will be no rate hikes until wage and inflation criteria are met. What’s more, in a speech soon after the minutes were out, Governor Lowe said that underlying inflation at the mid-point of the RBA’s range (2.5%), would not warrant a rate rise. Underlying inflation needs to stay well within the 2–3% range, and make them confident it will stay there, he added. In our view, this enhances the narrative communicated at the latest meeting, that is interest rate are unlikely to be touched next year.

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