USD
USD rebounded yesterday. EUR/USD fell to 1.3190, and GBP/USD fell to 1.9650 level. Nov retail sales rose from -0.4% to 1% growth, and above the market expectation of 0.2% which supported the dollar yesterday. I believe that the firm retail sales data is due to the holiday season effect. According to the CBOT fed funds futures, traders priced in only 18% chance of rate cut next year Q1 and I expect that the dollar will continue to rise in the short term. Investor should aware of Friday's inflation data which will affect the dollar substantially.

EUR
EUR/USD fell to 1.3190 yesterday. German Nov CPI fell 0.1% but the annual rate rose 1.5% which matched the market expectation. The data showed that the German inflation was moderate and the European government bond yield curve was inverted which was the fourth time since 2000. Euro cross rate retraced part of the gain yesterday as EUR/GBP fell to 0.6710, and EUR/AUD fell to 1.6800. Technically, EUR/USD breached 1.3265 short term support and the next support is at 1.3160. Resistance is at 1.3320.

GBP
GBP/USD fell to 1.9650 level but overall maintained the strengthened across the board. Nov Unemployment rate remained at 3% and the unemployment number fell 5700 which was the largest drop since Jan 2005. The average earning from Aug to Oct rose from 3.9% to 4.1% which showed that the tightening labour market has driven up the labour cost which will eventually contribute to the inflation. I believe that the BoE still have room for the rate hike next year Feb. GBP/CHF rose to 2.37, and GBP/JPY rose to 231 level which supported the Pound. Technically, GBP/USD gave away 1.9680 short term support and the next support is at 1.9550. The resistance is at 1.9700.

Yen
The Yen weakened further yesterday and the USD/JPY rose to 117.50. Japan Oct trade surplus fell 18.9% at the annual rate and narrowed from 1110billion to 956.2billion. Oct current account surplus also narrowed from 2024.9billion to 1514.6billion. The data confused the market about Japan's economic development and the rate hike schedule which was bearish to the Yen. EUR/JPY rose to 155 level and GBP/JPY also rose to 231 which pressured the Yen further. Technically, USD/JPY breached the 116.50 resistance and the next resistance is at 117.80. The support is at 116.50.