Dollar Back in Action With Strong Retail Sales Data

The recent performance of the U.S economy for the last couple of two-month was significantly great and it pushed the green bucks higher in the financial market against all of its major rivals. The green bucks gained its first bullish momentum in the last year held on 8th November 2016 during the event of the U.S presidential election. The consumer sentiment becomes extremely positive after Mr. Trump declared that they are going to increase the fiscal spending and initiate tax cut policy in the government. After such and promising step from the newly elected U.S president, the dollar exhibited a strong bullish rally in the market. Things went further more positive for the green bucks after the FED increased their interest rate in the month of December 201.On that event, the U.S dollar index secured the 14 years record high in the global market and pushed most of its major rivals on the ground.

Dollar index slips from its 14 years high:

After FED increased their interest rate on the basis of 25 points in the December FOMC meeting minute the dollar index rallied strongly in the market. But prior to the year closing, the dollar index slipped from its 14 years high in the market and caused a massive fear into the mind of dollar bulls. The leading economist in the world explained this phenomenon with the exhaustion of the buying pressure of the green bucks in the financial market. Most of the traders thought that the market has absorbed the initial bullish pressure and in order to exhibit another bullish rally in the market the buyers need positive fundamental news release from the U.S economy. But the market remain calmed at the last part of the year 2016 as most of the investors were celebrating Christmas holiday booking their profit in the market. All the professional traders were looking for the fresh New Year starting to trade the market with the great level of precision and many waited to sell the weakness of the green bucks to make some quick profit in the dollar retracement.

Gold price Vs. US dollar index:

The price of gold tested a critical support level in the market after the U.S dollar index secured a record high in the global market. But due to the recent slip of the U.S dollar index form is 14 years high in the global market, the gold bulls pushed the price of gold higher in the global market. The U.S dollar index is the over measure of the green bucks strength against the six major currency pairs in the world and the slight change in its values significantly affect the price of gold since the precious yellow metal is traded in the dollar. The gold price started a strong bullish rally in the market after hitting a level at 1120.94 in the market. Most of the professional gold traders went long at that level since the level was significantly strong and the slip of the dollar index give the professional traders a nice buying position in the market. After that the gold price secure 4 consecutive week gains in the financial market and finally it stopped its bullish rally after hitting the critical resistance level at 1207.57 in the market. Most of the long-term gold investors have booked their profit in the market since there is strong chance of rebound from this level.

Strong U.S retail sales data:

In the last trading week the dollar gained some of its bullish momentum in the market after the strong retail sales data in the global market. Before that, the green bucks was slowly losing its ground against its all major rivals in the global industry. The US dollar secured a low at 113.70 against the Japanese Yen but the positive data pushed the pair higher in the market. On the other hand side, the EURUSD pair was rallying higher in the market from the very beginning of this year but it slipped from the 1.06845 level in the market on the last Friday. On the contrary, the Aussie dollar was pretty much stable against the green bucks despite the strong news data in the U.S economy and currently the pair is testing the dynamic resistance level of the 100 and 200 days daily moving average. Most of the leading researchers are thinking that the dollar will again start its bullish rally in the market in the upcoming week since its bearish retracement is almost over. On the other hand, the U.S dollar index is trading at a critical support level and from there we can see a decent bounce off the U.S dollar index.

Summary:

The dollar lost most its strength in the global market but still remain broadly support from the very beginning of the year 2017.Most of the professional traders were on the sideline as the possible three rate hike by the FED has created extreme positive sentiment for the green bucks. However, in the last trading day, the dollar bulls impose a bullish threat to all of its major rivals as the U.S retail sales data came out better than expected.