Session Recap: Market reversal day after US retail sales

FXstreet.com (San Francisco) - Risk-on day in investments market with the riskier pairs reversing Monday's losses amid upbeat US retail sales in December. Adam Button from Forexlive commented in a recent piece that the "market was frightened of a disappointing retail sales and traders rushed to the exits on Monday but the data was more-or-less on expectations and that led to a rapid unwinding of the Monday moves."

The EUR/USD tested the 1.3700 area in the European session but the pair wasn't able to hold momentum and it remained trading in consolidation mode. EUR/USD is now trapped in a 1.3650/1.3700 range. The GBP/USD reversed half of Monday losses but the pair remains above the 1.6370 key resistance and it closed above 1.6400 at 1.6440.

The Japanese Yen was a big loser, "building on overnight price action after poor Japanese current account data," as Jamie Coleman from FXBeat commented. "Rising US rates and firm US data helped underpin the greenback." The Dollar's rebound against the JPY was powerful and recovered all Monday's losses with the USD/JPY closing at 104.25.

Wall Street closed near to highs on Tuesday in a key reversal day according to technician experts. The gold declined after three days of gains as the metal felt vertigo at 1,255/oz and dropped to closed at 1,244.

Main headlines in the American session:

US: Retail sales climb 0.2% in December

US: Import Price Index flat in December

US: Business Inventories grow 0.4% in November

Japanese current account gap not a crisis yet but bears watching

Hollande looking for public spending cuts of €50bn

Fed`s Fisher: US economy is doing better, expect growth of 3% or higher this year

Wall Street closed higher amid upbeat US economic data

Flash: UK CPI was under the spotlight - BBH

Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman noted the markets reaction earlier in Europe.
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