Forex Insight- 05/15/2018

May 15, 2018

EUR/USD

The EUR/USD pair finally broke down of its European session consolidation phase and tumbled below the 1.1900 handle in the last hour.

The pair extended overnight rejection slide from the vicinity of the key 1.2000 psychological mark and traded with a bearish bias for the second consecutive session on Tuesday. The US Dollar continued gaining positive traction, further supported by resurgent US Treasury bond yields, and kept exerting downward pressure on the major. 

 

 

 

The selling pressure remained unabated following the release of US monthly retail sales data, coming in to show a m-o-m growth of 0.3% for April. The positive in-line figure were further complemented by an upward revision of previous month's sales, now showing a growth of 0.8% m-o-m as against 0.6% reported earlier, and stronger than expected Empire State manufacturing index, which rose to 20.1 for May from 15.8 in April.

 

GBP/USD

The GBP/USD is trading around 1.3460, down 0.65% on the day. US 10-year bond-yields are above 3.05%, the highest in over six years. The move began earlier and has intensified after US Retail Sales enjoyed upward revisions

 

USD/JPY

The USD/JPY extends its gains after breaking 110.00 and trades above 110.30, the highest in three months. US bond-yields are at new multi-year highs and are sweeping the greenback higher. The move began before the publication of slightly upbeat US Retail Sales.

The pair is challenging fresh 4-month tops following the bullish move in yields of the key US 10-year note to the area beyond 3.05%, levels last traded in November 2011.

 

USD/CAD

The USD/CAD pair rallied over 100-pips during the early NA session and is now looking to build on its momentum back above the 1.2900 handle.

The pair caught some strong bids and pierced through 50-day SMA barrier amid a strong follow-through US Dollarbuying interest. Against the backdrop of resurgent US treasury bond yield, the buck got an additional boost following the release of better-than-expected Empire State manufacturing index and an upward revision of retail sales figures for March, offsetting slightly weaker data for April.

The bullish momentum accelerated further after Mexico's Economy Minister Ildefonso Guajardo was noted saying that he does not see NAFTA deal before May 17, which prompted some aggressive selling around the Canadian Dollar.

 

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