6 May Forex daily review
Dollar index went from a sideways corridor. Breaking through the support at 79.35, DXY index fell to 79.05. Dollar’s decline began in the European session. EURUSD and GBPUSD were supported by the data showing an increased level of business activity in Eurozone and UK. In the U.S. session, dollar index after updating minimum moved to a correctional phase.
So, what we have on the results of trading on Tuesday? EURUSD rose to 1.3950 mark and traded at 1.3925. GBPUSD rose by 125 points to 1.6995 and it was trading at 1.6980 in Asian session. AUDUSD exchange rate rose by about 90 points to 0.9365. USDCHF drop was 55 points to 0.8720. The market is quite now. Major currency pairs traded in narrow ranges, despite weak Chinese index of business activity in the services sector published earlier.
We would not expect sharp fall of the dollar, because serious statistics is not scheduled for Wednesday and tomorrow meetings of the ECB and the Bank of England are scheduled. Today, Fed chief Janet Yellen will make a speech in U.S. Congress. Investors will be interested in what she says regarding the fall of GDP in the U.S. in the 1st quarter over last report on the labor market, as well as hints on QE3 incentive program completion dates and the beginning of interest rates increase.
We tend to update the minimum of dollar index and rebound to moving average line. In EURUSD, 1.3950 mark on Wednesday will deliver a strong resistance level. GBPUSD may rise to 1.7015, but we underestimated the projected goal to 1.7000. Because of weak statistics from Australia and China, Australian dollar will remain under pressure.
On Tuesday, EURUSD broke through 1.3890 and rose to the level of 1.3950. 75 points remains to 1.4000 from current level. Given that the calendar is empty, except for Yellen’s performance, then we should not see an increase to 1.4000 mark. We are waiting the renovation of maximum at 1.3960 from the euro and return to moving average line. And so, the way is open to the resistance at the level of 1.4050.
British pound has exceeded the estimated target and managed to rise to 1.6995. The pair did not held 5 points to 1.7000 mark. The growth is limited by 1.7000, but buyers can drag the rate to the level of 1.7015. Yesterday the pound helped allies in crosses. Macroeconomic calendar is blank so today this support may not exists. We are waiting the return of rate to moving average line.
AUDUSD exchange rate against the backdrop of the fall of the U.S. dollar rose. Statistics from Australia and China were published worse than expected, so AUDUSD exchange rate fell and we think it will remain under pressure until the evening. When viewed from a technical point of view, new highest point is not enough (or divergence between the price and the stock). Moving average line will deliver the support.
USDCHF rate on Tuesday reached the support at 0.8725. Currently the pair is corrected and may retain sideways until Thursday.
Sorry. No data so far.