The dollar is having a tough time holding onto this morning’s gains and has slipped into the red against the euro and surrendered some of its gains against the yen. Despite dollar-friendly economic data, and a slight risk-on trade for U.S. equities, the dollar cannot get any upward momentum against the majors. Even the Canadian dollar has rebounded despite a huge sell-off in oil futures.
USD/JPY peaked at 11.333 after the GDP data, pulled back to 112.60 and then popped back over 113.00 on strong consumer confidence, but has yet been unable to hold its upward momentum, drifting lower again to below 113.00. This suggests some type of consolidation is taking place with Fibonacci retracement at 112.40 providing support. The pair last traded 0.60% higher at 112.60.
EUR/USD was supported at 1.0563, just ahead of the 200-hour moving average of 1.0596 and is moving higher at 1.0640, a gain for the euro of 0.30%. The euro is finally capitalizing on statements from the European Central Bank which said Tuesday it will support to Italian bonds and banks in the event Italians vote in favor of rewriting the constitution. EUR/USD last traded at 1.0614, a gain of 1.26%.