Dollar moves lower after CPI disappoints

Technical Analysis

Author: Greg Michalowski | dollar

Real average weekly earnings disappoint (0.6% YoY vs 1.0% last)

The retail sales were better. It was helped by auto and gas, but prior month was revised higher.  The CPI data was not up to snuff with a lower MoM gain and declines in YoY numbers.  Real average weekly earnings disappointing at 0.6% YoY vs 1.0% last. 

The USD has moved lower after the reports

EURUSD

The EURUSD has raced higher and looks to retest the key 200 hour MA at 1.1873 and the 50% retracement at 1.18803.  Remember the June 2010 swing low also came in at 1.1876 (that ole chestnut).   

Yesterday, the price spiked up to the area and found sellers.  We are back up testing that key cluster of resistance right now.  Can the sellers keep a lid on it?  That level is the "line in the sand" for bullish above, and bearish below.    


USDJPY

The USDJPY is breaking lower and has just fell below its key 200 day MA at 111.772.   The low has just reached 111.685.  The pair is finally breaking away from the 100 hour MA  (blue smooth line in the chart below) and the swing lows going back to September 27th (yellow area). The market this week has teased the market with dips below the floor area on Tuesday, Wednesday and Thursday with each break leading to a higher low and failures.   Today, the pair has spent all of the session below the yellow area and is looking to break even lower.   The sellers are making the play. Can they keep the momentum going?  The 111.45 is the next target. The 100 day MA at 111.11 and the 38.2% retracement of the move up from the September 8th low comes in around the same area.  


Risks for shorts, can be up to 111.957.  That is the 50% of the move down from the pre-release high.   It is also just below the natural 112.00 level.  That is risk for shorts looking to keep the break going.