US equities ended their five-day winning streak after the weak retail sales numbers. The data showed that retail sales declined by 1.1% in July as momentum slowed. This was the worst performance in the past few months. The numbers came on the same day that leading retailers announced mixed results. For example, Walmart had a strong quarter as more people moved into its stores. On the other hand, higher prices had an impact on Home Depot’s revenue. The Dow Jones, Nasdaq 100, and S&P500 index declined by more than 0.50%.
The Japanese yen was relatively unchanged during the Asian session after mixed economic data from Japan. According to the statistics agency, the country’s exports increased by 37% in July after rising by 48.6% in the previous month. Imports, on the other hand, rose by 28.5% in July. The two numbers were lower than the median estimate of 37% and 28.5%. This trend pushed the trade surplus to more than 441 billion yen. Meanwhile, data showed that the country’s core machinery orders declined by 1.5% in June after rising by 7.8% in May.
The NZDUSD pair slumped further on Wednesday. The decline happened as the government implemented lockdowns to curb the spread of the virus. This was after the country recorded its first Covid-19 case in more than 6 months. The lockdown will give authorities a chance to promote vaccinations and contact tracing. The pair also slumped during the Asian session after the Reserve Bank of New Zealand left rates unchanged at 0.25%. Investors were hoping that the bank would hike rates by 25 basis points. Other key numbers to watch today will be inflation from South Africa, Europe, UK, and Canada.
EURUSD
The EURUSD pair was little changed during the overnight session as traders waited for the latest Eurozone inflation data. The pair is trading at 1.1715, which is substantially lower than last Friday’s high of 1.1805. On the 4 hour chart, this price is along the lower side of the Bollinger Bands and is slightly below the 25-day moving averages. It has also formed the handle section of the cup and handle pattern. Therefore, the pair will likely maintain its bearish trend. The next reference point will be at 1.1650.
USDJPY
The USDJPY pair was little changed after the latest Japanese economic data. It is trading at 109.48, which was slightly above this week’s high of 109.10. On the four-hour chart, the price is slightly below the 25-day and 50-day exponential moving averages. It is also in the process of forming a head and shoulders pattern. At the same time, the MACD has formed a bullish crossover while the moving average of oscillator has moved above the neutral line. Therefore, the pair will likely remain in this range in the next few hours.
NZDUSD
The NZDUSD pair declined sharply after the RBNZ interest rate decision. The pair fell to 0.6867, which was the lowest level in several months. It was also significantly lower than this year’s high of 0.7465. On the four-hour chart, it is below the moving averages and along the lower line of the Bollinger Bands. The MACD has also moved below the neutral line. Therefore, the pair will likely maintain its bearish trend.
