EUR/CAD

Fundamental Overshadowing: Completely eclipsing the tepid to downside data released during the overnight, the underlying euro major spiked higher as rumored speculative position liquididation fueled much of the move higher.  Subsequently, stops were triggered above 1.2050, 1.2070 and 1.2100 figures as rumoured Swiss buyers were taking advantage of dips.  Euro zone data was relatively in line with estimates with most Italian data meeting consensus expectations.  Notably, however, the overall total trade balance dipped from a previous surplus to a current deficit with the EU comparison declining significantly versus the survey consensus.  Swiss retail sales rose 4.7 percent in the month of August.

Oil Prices Dip On Overextended Demand: Dipping further on yesterday's EIA weekly inventory report, crude oil contracts declined another 45 cents to $62.63 a barrel for November delivery.  Slipping to a two month low, oil prices fell further as market sentiment now dictates that recently high prices have curbed demand significantly, reducing consumption.  However, bullish underliers remain as many suspect another rise higher on winter consumption.

Technically Speaking: Bouncing off of the intrasession low of 1.4168, the pair moved considerably higher on the day based on euro major demand.  Now establishing what can be perceived as a momentary top, the price action looks to turn before any further upside can be accomplished.  As a result, if consolidation is broken through the 1.4300 figure, the 38.2 percent fib would serve as the first line of defense.  Any breaks below would subsequently see the 1.4185 figure retested.

NZD/USD

Retail Sales Rise: Increasing for the month of August, retail sales in the New Zealand economy rose 0.2 percent.  Rather paltry compared to the 1.8 percent rise witnessed in the prior month, the actual figure beat out consensus estimates of a decline of 0.6 percent.  Subsequently, climbing for the third month, the increase in spending, which constitutes 60 percent of the $97 billion economy, is sparking further speculation of rising interest rates by the Reserve Bank.  As a result, traders are anticipating next week's consumer prices data in confirming the upbeat notion.

Mixed US Data: Data was relatively mixed in the world's largest economy as retail sales vaulted higher for the month, but was trumped by a tame inflationary report.  Although sentiment still remains high of continued interest rate cuts, consensus may be shifting to a question of when the aforementioned notions will be discontinued.  As a result, with anticipation of forthcoming interest rate hikes in New Zealand rising, short term demand may be pulling the major higher.

Technically Speaking: Looking to dip already towards the close, the currency spot is bound for a retest of the 61.8 percent at 0.6955.  Any penetration below would see a more than likely bounce of f of the 50 percent fib at 0.6941 as it would coincide with the fib and bottomside support of the near term channel.

CAD/JPY

Positively Canadian: With the spike interest in euro denominations , the Canadian counter was not as effective in light of rising manufacturing shipments in the world's eighth largest economy.  Rising 3.3 percent for the month, the manufacturing sector saw shipments rise as oil exports increased along with demand for auto and machinery parts.  Statistics Canada stated the value of shipments rose to $51.87 billion, up from $50.21 billion in July.

Japanese Data Slides: Although industrial production figures were relatively in line with estimates, Tokyo department store sales dipped in the month of August, bucking the recent uptrend in consumer demand suggestives of the past two months. Still remaining positive, the lower figure could be expected as sales vaulted 1.2 percent higher with some expectations of a comparable decline.

Richard Lee is a Currency Strategist at FXCM.