The USD/CHF jumped above 0.9900 at a one-week high followed by a steep downward correction.
The pair was able to increase its gains this week, earning a profit for the third consecutive day on Wednesday, but a combination of factors limits the momentum.
A renewed sharp decline in US bond yields does not support the dollar, which has seen such an uptrend with the positive US retail trade.
Added to this is the cautious mood surrounding the US-China trading tensions, which benefits the safe haven of the Swiss franc.
US President Donald Trump had announced that he would raise more than $ 325 billion in Chinese goods.
The continued recovery in demand for the single currency has led the EUR/JPY to rise to the daily high of 121.40/45.
After three losing days in a row, the pair tries to recover from the low of 121.00 from the week low.
US yields are at the daily sub-prime and on the other hand, selling propensities to the safe haven of the Japanese yen are picking up, supporting the rebound in the EUR/JPY.
The Eurozone's June inflation was in line with previous readings, rising by 0.2% and 1.3% on a monthly and annual basis. The core CPI was in line with forecasts as it was at 1.1%.
Previously, ECB member B. Coeure said that the downside risks of the euro zone are increasing. Next, the Fed Beige Book awaits us from the economic calendar.
The USD/CAD pair has come under selling pressure on the day, eroding some of yesterday gains. Renewed buying interest in the US Dollar after positive retail sales figures of June helped the pair to gain goodish momentum.
Moreover, crude oil prices also kept pressure on the Canadian Dollar. However, the upside lost its momentum on Wednesday and price retraced towards mid-1.3000 area.
Further fresh impetus will be provided by the Canadian CPI data due in early NY session on the day.
The EUR/USD pair extended the leg lower towards 1.1200 handle where it found mild support on the day.
However, breaking below the 1.1200 handle may open doors to 1.1180 ahead of 1.1115. Overall, the outlook stays negative for as long as the price stays below 200-day moving average at 1.1320.
US Dollar index has been in the recovery mode since the week started. The index has extended gains beyond 97.00 handle.
Immediate barrier for the index lies art 97.60 followed by 97.80 (June highs). If the price sustains above 200-day moving average (96.80) then the probability of further gains will be high.
Technical Levels to Consider
The GBP/USD pair is moving lower, marking fresh yearly lows during early London session. The pair has broken below 1.2400 handle and the interim support comes at 1.2350 below which the path is opened towards 1.2100 and 1.2000.
There is no fresh development on Brexit issue while Johnson and Hunt are probably keeping hard line in negotiations with EU and they insist on no further renegotiation.
Nikkei has mimicked the tone of Wall Street overnight which was hurt by remarks of Trump as he reiterated on imposing more tariffs on China if ever wanted. Shanghai Composite and Hang Seng indices are also down by 0.1% and 0.3% respectively.
The WTI barrel has risen on Tuesday, but trading is still under the psychological $ 60 mark.
The barrel of WTI seems to recover on Tuesday after the strong sell-off. On Monday, the WTI course had fallen, after which production in the Gulf of Mexico was slowly resumed, as the storm in the region has moved away. The US-China trade disputes continue to persist, affecting global oil demand.
Later, we expect the results of the American Petroleum Institute (API), which publishes the weekly US crude oil inventories, before tomorrow follows the official EIA report.
The gold price broke out of its consolidation and so the low of the day was formed with the early American session under $1410.
The already strong dollar continued to build on its positive momentum with the release of monthly US retail sales, the most important factor behind the downward pressure on the commodity.
Add to this the rise in US bond yields, which deprives the non-interest-bearing safe haven of demand, combined with the positive mood on the stock markets.
The downside remains at least currently limited as investors do not want to take any major positions ahead of Fed Chairman J. Powell's speech .
Therefore, it would be advisable to wait for greater momentum before expanding its positioning for a short-term downward move towards the psychological $1400 mark.
The GBP/USD is in a downtrend among the major SMAs. The market is approaching the psychological mark of 1.2400 while trading is at the 27-month low. The GBP/USD fell below the 1.2485 support. The bears have the 1.2385 and 1.2340 to the goal. The Cable is trading below the major SMAs and this signals a bearish momentum.
The downward pressure on the EUR/USD increased and so the pair approaches the critical support of 1.1200.
The pair is in an increasing downward pressure and so the psychological mark of 1.1200 is in danger, after the US economic data were promising and so the buying interest against the dollar increased.
US retail sales rose 0.4% yoy in June and core sales also gained 0.4%, better than expected. US export/import prices fell by -0.7% and -0.9% on a monthly basis.
The German ZEW survey showed that the economic sentiment has deteriorated even further in the current month, while the Eurozone's economic sentiment has improved slightly.
Later, the US economic production, the NAHB index, the TIC flows and the business holdings, as well as the Fed Powell speech in Paris, await us from the economic calendar .
The common currency can continue its Powell-induced march to the north, after bottoming out at 1.1190 last week. However, it could be a short-lived move as speculation on further monetary stimulus from the European Central Bank increases as interest rate cuts and a QE program may occur in July or September.
The dollar has risen in response to positive US retail data, with USD/JPY peaking at 108.15.
Data released on Tuesday showed that retail sales increased by 0.4% on a monthly basis in June, reflecting the revised reading of the previous month and exceeding the forecast of 0.1%.
The sellers without real estate and the Control Group sellers were better than expected, and along with the rise in US Treasury bond yields, demand for the dollar was up.
Apart from the initial reaction, the upswing lacked strong momentum as investors did not want to take any major positions ahead of Fed Chairman J. Powell's speech.
The increasing selling pressure against the British pound allowed the EUR/GBP to rise above the 0.90 level at the new multi-month high.
The European couple will rise on Tuesday for the second consecutive session, breaking out of the multi-day consolidation and so the 0.9000 has been surmounted above.
Sterling selling pressure has risen today as the greenback rebounded sharply and the UK labor market report was mixed. The unemployment rate remained at 3.8%, as expected, but the number of applicants for unemployment benefits rose by 38.0K in June. The average hourly wages with bonuses increased by 3.4% in May compared to the previous year, which was better than expected.
The potential successors to Prime Minister Theresa May, Boris Johnson and Jeremy Hunt are each of the view that a no-deal Brexit is still possible, while classify the Northern Irish backstop as "dead".