U.S. Dollar Pulls Back As Retail Sales Drop: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY

U.S. Dollar Retreats As Retail Sales Miss Estimates

U.S. Dollar Index is losing ground as traders focus on the disappointing Retail Sales report. The report indicated that Retail Sales decreased by -0.6% month-over-month in July, compared to analyst forecast of +0.1%.

Traders also had a chance to take a look at the Michigan Consumer Sentiment report. The report showed that Michigan Consumer Sentiment declined from 55.2 in July to 51.0 in August, compared to analyst consensus of 54.5.

The nearest support level for U.S. Dollar Index is located in the 99.25 – 99.40 range. In case U.S. Dollar Index manages to settle below the 99.25 level, it will move towards the next support level, which is located in the 98.60 – 98.75 range.

EUR/USD Tests New Highs As Traders Focus On U.S. Economic Data

EUR/USD gains ground as traders react to Wholesale Prices report from Germany. The report showed that Wholesale Prices increased by +0.2% month-over-month in July, compared to analyst forecast of +0.4%.

If EUR/USD stays above the 1.1550 level, it will head towards the nearest resistance, which is located in the 1.1600 – 1.1615 range. A successful test of this level will push EUR/USD towards the next resistance at 1.1685 – 1.1700.

GBP/USD Tests Resistance At 1.3550 – 1.3565

GBP/USD moves higher as traders focus on economic reports from the U.S. Traders bet that weak economic data will force the Fed to be more dovish.

Currently, GBP/USD is trying to settle above the resistance level at 1.3550 – 1.3565. In case GBP/USD manages to settle above the 1.3565 level, it will head towards the next resistance level, which is located in the 1.3635 – 1.3650 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Tests New Lows As Pullback Continues

USD/CAD pulled back as traders focused on rising precious metals markets and reacted to the weak Retail Sales report from the U.S. Gold climbed towards the $4400 level, while silver moved back towards the $65.00 level. Other commodity-related currencies were also moving higher in today’s trading session.

USD/CAD settled below the previous support at 1.3920 – 1.3935 and is trying to settle below the 1.3870 level. In case this attempt is successful, USD/CAD will head towards the next support level, which is located in the 1.3825 – 1.3840 range.

USD/JPY Climbs Back Towards The 159.50 Level

USD/JPY rebounded from session lows and moved back towards the key 159.50 level. Treasury yields are moving higher despite weak Retail Sales data, providing additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.15% level, while the yield of 10-year Treasuries settled above 4.69%. Treasury yields moved higher as bond traders focused on rising oil prices.

If USD/JPY manages to settle above the resistance level at 159.50 – 160.00, it will head towards the next resistance at 161.50 – 162.00. It remains to be seen whether BoJ is ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.

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