The USD is moving lower after the US retail sales miss.
Retail sales missed expectations across the board, signaling a weak start to the year. Headline retail sales fell -0.9% (vs. -0.1% expected), while the control group declined -0.8% (vs. +0.3% expected). Although there were minor upward revisions to the prior month, the overall data was disappointing. Factors such as California wildfires, adverse weather, tariffs, and rising prices may have played a role, especially as consumer sentiment had already begun to deteriorate. A slowdown isn’t entirely negative, considering the strong second half of 2024 and persistent inflation concerns. Following the report, the U.S. dollar moved lower.EURUSD: The EURUSD has climbed to a new session high near 1.0500, reaching 1.0497 before pulling back slightly to 1.0492. The pair is extending gains after breaking away from a key swing area between 1.0452 and 1.0467. Earlier in the session, the price initially moved above this zone, then retraced back into it before finding support and rebounding higher. This breakout strengthens the bullish momentum in the short term.USDJPY: The USDJPY is trending lower, breaking away from the moving average cluster between 152.698 and 153.064 (see blue and green lines on the chart). Currently trading at 152.135, the next downside targets are 151.798, followed by a key swing area between 151.20 and 151.34, and the February low at 150.922. As long as the price remains below the moving average cluster, the bearish bias strengthens, favoring further downside in the medium-term outlook.GBPUSD: The GBP/USD has reached the 38.2% retracement level at 1.26076, positioned within a key swing area between 1.2596 and 1.26147. A sustained break above this zone would strengthen bullish sentiment and provide buyers with more confidence. If momentum continues, the next upside target lies in the 1.2663–1.2670 range, followed by the 100-day moving average at 1.26959. Holding above the 38.2% retracement level is crucial for further upside. However, failure to break through or a stall at this level would suggest a standard correction rather than a strong reversal. This remains a key technical level to watch.Looking at the premarket stock indices, the major indices are marginally lower:Dow industrial average -64 pointsS&P index -1.7 pointsNASDAQ index -11.5 pointsMeta shares are still down -0.49%.US yields have moved lower which may be helping things like stocks and also pushing the US dollar lower:2-year yield 4.258%, -5.2 basis points.5-year yield 4.320%, -6.6 basis points10-year yield 4.468%, -5.6 basis points30-year yield 4.685% -4.1 basis points This article was written by Greg Michalowski at www.forexlive.com.
Retail sales missed expectations across the board, signaling a weak start to the year. Headline retail sales fell -0.9% (vs. -0.1% expected), while the control group declined -0.8% (vs. +0.3% expected). Although there were minor upward revisions to the prior month, the overall data was disappointing.
Factors such as California wildfires, adverse weather, tariffs, and rising prices may have played a role, especially as consumer sentiment had already begun to deteriorate. A slowdown isn’t entirely negative, considering the strong second half of 2024 and persistent inflation concerns.
Following the report, the U.S. dollar moved lower.
EURUSD: The EURUSD has climbed to a new session high near 1.0500, reaching 1.0497 before pulling back slightly to 1.0492. The pair is extending gains after breaking away from a key swing area between 1.0452 and 1.0467. Earlier in the session, the price initially moved above this zone, then retraced back into it before finding support and rebounding higher. This breakout strengthens the bullish momentum in the short term.
USDJPY: The USDJPY is trending lower, breaking away from the moving average cluster between 152.698 and 153.064 (see blue and green lines on the chart). Currently trading at 152.135, the next downside targets are 151.798, followed by a key swing area between 151.20 and 151.34, and the February low at 150.922. As long as the price remains below the moving average cluster, the bearish bias strengthens, favoring further downside in the medium-term outlook.
GBPUSD: The GBP/USD has reached the 38.2% retracement level at 1.26076, positioned within a key swing area between 1.2596 and 1.26147. A sustained break above this zone would strengthen bullish sentiment and provide buyers with more confidence. If momentum continues, the next upside target lies in the 1.2663–1.2670 range, followed by the 100-day moving average at 1.26959. Holding above the 38.2% retracement level is crucial for further upside. However, failure to break through or a stall at this level would suggest a standard correction rather than a strong reversal. This remains a key technical level to watch.
Looking at the premarket stock indices, the major indices are marginally lower:
- Dow industrial average -64 points
- S&P index -1.7 points
- NASDAQ index -11.5 points
Meta shares are still down -0.49%.
US yields have moved lower which may be helping things like stocks and also pushing the US dollar lower:
- 2-year yield 4.258%, -5.2 basis points.
- 5-year yield 4.320%, -6.6 basis points
- 10-year yield 4.468%, -5.6 basis points
- 30-year yield 4.685% -4.1 basis points
