San Francisco, U.S. Image source: Güldem Üstün, flickr.com
The underlying rally of the U.S. dollar was bolstered earlier today following the release of the October retail sales data. The greenback looks poised to continue climbing in the near term, the likelihood of which is examined in greater detail in our latest EURUSD analysis.
The U.S. Census Bureau just revealed that consumption had nearly doubled in October, inspired by the recent uptick in headline inflation. The jump in retail sales was above the expectations of the consensus forecasts. This had a positive impact on the rallying greenback in the short term.
USDCHF 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
As can be seen on the 4H chart above, the USDCHF is in the process of establishing a new 1-5 impulse wave pattern, as postulated by the Elliott Wave Theory. This bullish 1-5 pattern emerged following the completion of the preceding bearish 1-5 structure.
Presently, the upswing appears to be denied at the 23.6 per cent Fibonacci retracement level at 0.92850, which underpins a major resistance area just below it. A potential reversal from this threshold would likely be followed by a subsequent dropdown to the 38.2 per cent Fibonacci at 0.92340.
The possibility for such a development is highlighted by the emergence of a Shooting Star, which represents a classic reversal indication, at the 23.6 per cent Fibonacci
Consumption nearly doubled in October
U.S. MoM Retail Sales. Image source: TradingEconomics.com
According to the findings of the Census Bureau, retail sales advanced by 1.7 per cent in October, above the market forecasts of 1.3 per cent. This measures a significant increase from a month prior when consumption was reported at 0.8 per cent.
The heightened consumer demand is inlined with the significant growth in employment that was recorded over the same period, as the general economy continues to expand.
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