Fundamental analytics

August retail sales were weaker than expected, USD dollar gained on technical factors

One more trading week is heading to the end. Today we waited for US retail sales data and watched USD dollar decline. The latest important statistics on the US economy this week turned out to be weaker than economists had expected. One can say that the data came out mixed, on the one hand, Americans sharply cut their spending in August, as retail sales in August added only 0.1%, with expectations of 0.4% -0.5% against the previous month. On the other hand, the data for July was sharply revised. According to new data, retail sales in July amounted to 0.7%.

On this background, the reaction of the US dollar was more interesting to watch. On Wednesday and Thursday, after the release of weak data on industrial and consumer prices, the US currency went to weakening. In the course of decline, US dollar index reached the closest goal of the current downward impulse and fell into the 94.35 points. This is a strong support zone. Today's statistics publication on retail sales coincided with the rebound of the index from the level of 94.35 points. The nearest resistance is in the area of 94.80, the area of the former strong support.

Amid the local growth of the US dollar, most of the FOREX market instruments lose their previously won positions. The European currency denominated daily highs in the $ 1.1721 zone, but after the release of statistical data, it moved down sharply. The closest support for this FX instrument is at the point of recent resistance, the famous $ 1.1640 zone.

An interesting situation has developed in the British currency market. After the dollar moved to strengthening, the pound lost most of its current gains. On the chart, a false breakdown has clearly formed. Quotes fell to the area of 1.3075.

The greatest and most rapid change in the trading course occurred in the gold market. Gaining USD dollar led to sharp shorts in the gold market. Prior to the release of statistics, gold tried to gain a foothold above $ 1206 level. Stronger USD dollar sent gold quotes down to the area of $ 1197. For the rest of the trading session the bulls will likely try  to fortify their positions above the support $1196.

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