EURUSD: Buyers Take A Breather Before Pushing Higher

Major currencies showed multidirectional dynamics heading into the weekend. The steepest declines against the US dollar were shown by the Australian dollar (-0.76%) and the Japanese yen (-0.72%). In addition, the New Zealand dollar shed 0.42%, the euro dipped 0.15%, and the Swiss franc fell 0.11%. Only the Canadian dollar (+0.24%) and the British pound (+0.74%) closed higher.

The US dollar weakened against major currencies on Friday after reports that retail sales printed lower than expected in April, while concerns about mounting inflation eased. The euro also drew support from European macro data.

Stateside, retail sales were unchanged in April after a 10.7% rise in March, boosted by Covid stimulus checks. Investors expect retail sales to pick up next month as restrictions are lifted and Americans start spending their savings.

Today’s macro agenda (GMT+3)

  • 15:15 Canada: housing starts (April), 15:30 foreign securities purchases (March); US: NY empire state manufacturing (May)
  • 17:00 US: NAHB housing market index (May)
  • 17:05 US: Fed member Richard Clarida speech
  • 17:15 UK: Silvana Tenreyro Bank of England MPC speech
  • 17:25 Fed member Raphael Bostic speech
  • 18:30 UK: Gertjyan Vliegh Bank of England MPC speech
  • 19:30 Andy Haldane Bank of England MPC speech
  • 23:00 US: foreign bond investment (March)

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Current outlook

At the time of writing, the euro was trading at 1.2139. The price action slowed down at 1.2150. That said, the market remains poised to extend Friday's rally. Resistance is the range of 1.2175-1.2180. In line with technical analysis, the active phase of growth will come during the North American trading session on Tuesday or the European session on Wednesday. Buyers need to hold the 1.2105 level in order to retrace to the May 11 high of 1.2182.

Many speeches by heads and representatives of world central banks are slated for the first half of the week. It is hard to say who will say what, or how market participants will react. When there are many speakers, there is a risk of erratic upward and downward swings amid trendless trading.

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Disclaimer: Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial ...

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