US consumers are saving more and spending less, based on the personal income and spending data while core PCE prices are close to the Fed’s target at 1.8%. Looks like short-term players have gotten themselves long on the rally to the 1.3230s and are feeling a bit of pain near-term. 1.3075/85 remains important support on dips with stops in the 1.3065/70 area.
The rally late last week essentially reached the 38.2% retracement of the 1.4250/1.2625 drop, so the return in pressure is a sign that the downtrend is reasserting itself.