FxWirePro: Forex Daily Update

The US dollar index pared some of its gains despite US retail sales. It rose 0.60% m/m in Dec, compared to a forecast of 0.40%. Core retail sales ex-auto jumped 0.40% vs.0.20. It hit a low of 103.20 and is currently trading around 103.26.

   According to the CME Fed watch tool, the probability of a no-rate cut in  Jan increased to 97.40% from 95.80% a week ago.

 The US 10-year yield 'gained more than 5% on strong retail sales data. The US 10 and 2-year spread widened to -24.30% from -17%.

Major resistance- 103.75/105

Major support- 102/101.60.

EURUSD-

EURUSD recovered more than 50 pips on hawkish comments from ECB officials. ECB President Lagarde hints at rate cut this summer at Davos speech. Eurozone final CPI came at 2.90% in line with the estimate of 2.90%.

Major resistance-1.090,1.0965

Major support- 1.0860,1.0800

Yen-

The pair trades higher on surging US treasury yield. Any close above 148.60 confirms further bullishness.

Major Resistance- 148.60,150

Major support- 147.70,146.40

Canadian Dollar

The Canadian dollar showed a minor pullback on strong crude oil prices.

Resistance- 1.3570,1.3645

Major support- 1.3480, 1.3435

Economic calendar

US building permits and Philly fed manufacturing  (1:30 pm GMT)