USD Rallies on Better Data To Hit 2.5 Week Highs

Orbex Market Flash

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USD Surges Into The Weekend

Over the European session on Friday, the US dollar enjoyed a strong rally as firmer demand, fuelled by better US data, saw exacerbated USD upside. March retail sales, delivered yesterday, came in well above expectations stoking USD buyers into the Easter weekend. USD Index is now trading 97.17 as price breaks above the 91.10 level to trade to two and a half week highs. A weekly close above the 91.10 level will bring the 97.68 level into focus early next week.

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EUR Still Capped By Domestic Economic Concerns

EURUSD is trading back in the green today, following yesterday’s sharp sell-off, despite the rally in USD. Not much of a driver to pin the move on so likely some pre-weekend adjustment in light trading conditions. EUR remains skewed to the downside given the persistent concerns over the health of the eurozone, while USD is enjoying better trading on positive data surprises and re-emerging Fed rate hike expectations. EURUSD trades 1.1243 last, in the middle of the local 1.1186 – 1.1293 range.

Pound Still Rangebound

GBPUSD is fighting to stay above the 1.30 level support on the last trading day of the week. The 1.30 – 1.33 range which has underpinned price action this year is in danger of breaking to the downside following yesterday’s moves. However, for now, buyers are holding on.

Risk Assets Quieter into Weekend

Risk appetite has strengthened again into the weekend. However, overall, tone has been muted with the SPX500 ending the week slightly in the red following earlier strength, though still above the 2895.92 support. Optimism over a US/China trade deal has been a boost for risk this week though concerns around the potentially burgeoning US/EU trade war has tempered this optimism. Furthermore, stronger US data and the prospect of a return to US rate hikes has seen equity buyers pause for now.

Gold Prices Break key Support

Safe havens have benefitted from this diminished end to the week for risk appetite as, despite the stronger US dollar, both gold and JPY have been higher against the greenback today. Gold prices yesterday broke down through the key 1280.58 level which has underpinned price action this year and for now, price is yet to retest the level. USDJPY continues to move lower from the 112.16 level resistance. However, the move lacks weight and focus remains on an eventual upside break.

Oil Rally Stalls on Record US Production

Oil prices too have seen much quieter trading over recent sessions, remaining range bound over the course of the week. Yesterday, the EIA’s latest report covering industry stockpiling levels over the prior week, showed an unexpected drawdown in US crude stocks. However, with US crude production remaining at record highs and the EIA forecasting much higher levels to come in 2019, oil prices failed to deliver fresh upside. For now, crude is back under the 64.38 level with 63.14 acting as support.

Commodity Currencies End The Week Lower

The Canadian dollar remains under pressure into the end of the week as a resurgent US dollar along with subdued oil prices, have allowed for USDCAD to end the week higher. However, price is yet to close above the 1.3377 level which continues to hold as resistance for now.

AUDUSD has posted some minor gains on the final day of the week, though still down sharply from highs of the week printed above .72 on Wednesday. Better China data as well as optimism around a potential trade deal, have kept AUD supported though weakness in oil markets and a stronger USD have capped gains with AUDUSD ending the week around .7150.

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