The US dollar, which had outperformed its rivals on Friday, struggled to find demand at the beginning of the new week. The USD Index extended its weekly uptrend and reached its highest level since early May near 106.00. However, the dollar's strength waned as it failed to attract meaningful buyers. EUR/USD traded near 1.0700, while GBP/USD remained range-bound near 1.2650. Meanwhile, gold prices (XAU/USD) saw some dip-buying during early European trading hours, recovering from a retracement slide from a two-week high reached on Friday.
Last week, the US dollar index showed a minor pullback amid mixed US economic data. It hit a high of 105.91 and is currently trading around 105.73. US retail sales grew marginally lower to 0.10% in May showing slight weakness in consumer spending. Housing starts and building permits came in below market expectations due to higher interest rates. US flash manufacturing and services PMI surged above market expectations. The number of people who have filed for unemployment benefits declined by 5000 to 238000 in the week ending June 15th, 2024. According to the CME Fed watch tool, the probability of a 25 bpbs rate cut in Sep decreased to 57.90% from 61.10% a week ago.
EURUSD surged slightly above 1.0700 despite weak German IFO data. It hit a high of 1.07178 and is currently trading around 1.07149. German IFO business climate came at 88.60 in June compared to a forecast of 89.70. The pair holds above the 159 level despite BOJ comments about Forex's intervention. Any close above 160.20 confirms further bullishness.
The Canadian dollar gained momentum after Canadian retail sales. Any break above 1.3600 confirms further bullishness.
AAVEUSD, a cryptocurrency pair, was the best performer for the past two days, surging more than 25% after breaking significant resistance of $118. The pair holds well above the short-term (21 and 55 EMA) and long-term moving average. It hit a high of $93 and is currently trading around $92.16. The immediate resistance stands at around $100. Any breach above confirms a minor pullback. A jump to $118/$135 is possible. A surge past $135 will take AAVE to $173. It is good to buy on dips around $80 with SL around $70 for TP of $118/$135. [c5fe8131]