The European retails sales have undermined the single currency ability to stand above 1.35 amid profit taken wave could contain the current market sentiment pushing the greenback and the Japanese yen higher again with the opening of the US session. The European retail sales declined in Feb by 4% y/y and -.6% m/m and the market was waiting for a decline by 2.5% y/y and .3% m/m.
The Asian equity markets has opened in the green territory and the European stock markets opened higher as expected after the Dow closing above 8000 last week but Dow has opened lower than this close at 8915 capping the greenback loses across the broad but it managed to creep up in the last hour of the session after recording 7862 low to close down by 41 points at 7976. The gold continued its loses below 900$ amid the market optimism which contained the market sentiment with the beginning of this week in Asia and Europe but it is still struggling to get back above 880$ again after testing 864$ several times yesterday.
The cable which could close above the previous resistance at 1.4777 could not hold its gains above 1.49 or even pass to test 1.50 psychological level pushed down by a profit taken wave could test
1.465 support level again. There is a head and shoulder formation over the hourly charts and the neckline of this head and shoulder is at this level. The head has formed today at 1.4955 and the second shoulder has ended at 1.4777 which can put pressure on the cable on the breaking of 1.465. The next support is at 1.452 then 1.447 then 1.435 and 1.425 and the way up should meet with a resistance at 1.4777 again and the formed top yesterday at 1.4955. We wait later today for the release of UK February Manufacturing Production which is expected to be down yearly by 14.2% and monthly by 1.5% and the UK industrial production which is expected to be down by 1.2% monthly and 12.5% yearly which can effect on the British pound by this week MPC meeting which is expected to make no change in the current interest rate after the recent cut to .5%.Best wishes
FX Consultant Walid Salah El Din E-Mail: snipped-for-privacy@fx-recommends.com