The focus at the end of last week was that US retail sales were not 'material' enough to spark a 100 bps rate hike by the Fed next week and that saw the dollar falter as market bets retreated. The mood is continuing to today with risk tones also leaning more positively and we are seeing the greenback being offered early on.
EUR/USD is now up 0.4% to 1.0126 and threatening a push above its 200-hour moving average and 23.6 Fib retracement level at 1.0109:
The push above the former sees buyers seize near-term control and there might be scope for a further retracement towards 1.0200 potentially with the 38.2 Fib retracement level nearby at 1.0205. In the bigger picture, I'm still inclined to fade euro gains but for now, the focus is on the dollar and the Fed and sentiment is leaning towards a softer stance going into next week - at least for now.
Elsewhere, GBP/USD is also up 0.6% to back above 1.1900 and USD/JPY is down 0.2% to 138.25 after hanging over 139.00 last week.
