USD buyers get an added boost as retail sales in the US beat forecasts
US retail sales have come in higher than expected, rising 1.6% in March vs 0.9% expected, reversing the modest losses in Feb and some. The retail control group which accounts for changes in spending habits also rises above forecasts, coming in at 1.0% vs 0.4% expected. Ex-gas and auto retail sales were a little more modest, coming in at 0.9% vs 0.5% expected but the numbers are healthy enough to give the USD another shove higher.
USD/JPY is still struggling ahead of 112.00-25, but EUR/USD and Cable have both been thrust lower to tackle support points which if materially triggered, could lead to some notable losses later on in the North American session.
EUR/USD support at 1.1230 is the immediate target, and a push below here may well see us retesting the lows at 1.1175 again. Cable support is here at 1.3000-1.2950, with the market taking little notice of the earlier retail sales beat in the UK, and indeed, some of the other positive data out this week. A break under 1.2950 could see a move down to 1.2900 and then 1.2800 with Brexit uncertainty still hanging in the air.
Elsewhere, NZD/USD is an easy target as we head back under 0.6700 again, though sellers are a little more hesitant in AUD/USD as we hold the mid 0.7100's for now.
USD/CAD is also pushing higher despite health retail sales in Feb in Canada, which rose 0.8% on the month - double what was expected. Core retail sales rose 0.6% vs 0.2% forecast. USD/CAD is back testing 1.3400 as a result, but as we have seen previously, there is good interest to sell at these levels in the near term.