US construction spending better than expected - still no USD reaction!

Published date: 13/03/2019

Much like earlier on, the market is ignoring the US data and continues to sell the USD against most of its major counterparts with the exception of the JPY, which remains on the back foot as part of the carry trade correlation with positive stocks. 

Construction spending, again for Jan, has come in much higher than expected at 1.4% against consensus forecasts of 0.4%, though no positive response has been seen from the market.  

EUR/USD is now looking to push levels seen ahead of the ECB meeting last week and there is a chance that we could extend beyond here and challenge much higher levels closer to the 1.1350-70 range.  This would likely be more of a technical move, with stops above 1.3110-20 anticipated.  

Cable has also pushed higher as many expect the UK parliament to reject a no deal Brexit later on this evening and traders are expecting this result to send the Pound higher later on this evening, potentially through the 1.3300 level.  This may be unlikely at this stage as we still have the Brexit extension vote to contend with on Thursday, so weekly highs at 1.3275-80 will be the initial target here.  

USD/JPY is still in a very tight range above 111.00 and is showing very little interest in breaking out significantly one way or the other.


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