News on the US debt ceiling is still shaping the market sentiment. Traders understand that the US authorities will not allow the country to face a default. A delay in reaching a compromise is just a bargain. Thus, the greenback’s appreciation could hardly be explained by its safe-haven status. The US currency remains in demand thanks to fresh hints that the Federal Reserve intends to keep interest rates at a high level.
At the same time, data from Europe could hardly encourage buyers of the euro and the pound sterling.
The decline in UK retail sales slackened to 3.0% from 3.9%, which is significantly worse than expected. Economists had anticipated a smaller drop of 2.6%. Nevertheless, the report managed to push the pound sterling slightly higher. This, in turn, has positively affected the euro. The fact is that the US dollar is considerably overbought. That is why even such a minor improvement is considered a positive factor.
However, the greenback remains overbought. The situation has changed, though quite unnoticeably. Today’s data on the US durable goods orders may lower overbought conditions. The fact is that the indicator is expected to decrease by 1.1%. It is a leading indicator for retail sales, which reflects the situation in the US services sector. Notably, over 80% of the US economy is made up of services. That is why a possible drop in consumer activity is an absolutely negative factor.
On the trading chart, we see that the euro goes on losing value against the US dollar. As a result, the pair reached the levels recorded in March this year. Such a rapid decrease could be defined as inertial. Many technical signals are ignored in the market.
Since short positions on the euro are overheated, there is a possibility of a full-scale technical rebound. This, in turn, may allow the pair to return to 1.0800. However, speculators are ignoring the technical signals of the euro’s oversold conditions and the greenback’s overbought conditions. That is why the price settlement below 1.0700 may lead to the continuation of the inertial downward movement.
Meanwhile, the pound sterling also continues to fall against the US dollar. The pair has already dropped below 1.2350. This strong price change spurred a technical signal of oversold conditions on the pound sterling.
As short positions are overheated, the pair may rebound. However, speculators are paying zero attention to technical signals. In this light, the price may settle below 1.2300 and slide even deeper.
That’s all for now. We keep monitoring the financial market situation. Subscribe to our channel. See you in several hours. We will take a close look at the US trading session.

00:00 Introduction
00:40 UK retail sales
01:13 Slight softening of the overbought USD
01:52 EUR/USD
02:462GBP/USD
03:18 Conclusion

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