Last week, the US economy grew at an annualized 6.4% rate in the first quarter unrevised from the prior estimate released last Monday. The US jobs market edged closer to its pre-pandemic self, last week as initial jobless claims totalled just 406,000 for the week ended on 22nd May. The main headline from last week was the extension of the risk appetite although it has become significantly muted as fears of rising inflation increased, especially concerning the US economy.
In the coming week, we can see that its going to be busy, with the Friday being the catalyst with the US NFP figures. The US unemployment is expected to reduce its unemployment rate by 5.9% from 6.1% last month.
The major events this coming week will be releases of the US Non-Farm Payrolls, the Reserve Bank of Australia’s rate statement and Australian GDP data. This implies that the US Dollar (Thursday and Friday) and the Aussie Dollar (Tuesday and Wednesday) are likely to experience volatility over this coming week. Tomorrow, Monday UK banks will be closed in observance of the Spring Bank Holiday and US banks will be closed in observance of Memorial Day.
Major Currencies Performance and Signals
EUR/USD
The euro fluctuated during the week, but the most interesting thing is that we continue to struggle above the 1.22 handle. We remain again Neutral on the Euro pair.
FORECAST: NEUTRAL
Resistance: 1.2200, 1.2250, 1.2300
Support: 1.2150, 1.2100, 1.2050
GBP/USD
The GBP initially fell during the course of the week, but has turned around to show signs of resilience. At this stage, it looks like pullbacks in the British pound continue to be buying opportunities based upon price and the fact that the US dollar is declining in general.
FORECAST: LONG
Resistance: 1.4200, 1.4250, 1.4300
Support: 1.4150, 1.4100, 1.4050
AUD/USD
Last week, the Aussie finished the week with a bearish trend after a ranging neutral session. We expect that next week the AUDUSD will carry on the bearish trend downwards with an eye at the US NFP on Friday.
FORECAST: SELL
Resistance: 0.7750, 0.7800, 0.7850,
Support: 0.7700, 0.7650, 0.7600
USD/JPY
The Japan’s government extended the state of emergency until June 20 while US Treasury yields are still the main motor for USDJPY. The pair could extend its momentum in the upcoming sessions toward 111.00.
FORECAST: BUY
Resistance: 110.50, 111.00, 111.50
Support: 109.50, 109.00, 108.50
USD/CAD
If the US dollar cannot rebound after the last weeks huge move to the downside, it is very likely to give up especially if it breaks the 1.20 price line.
FORECAST: SELL
Resistance: 1.2100, 1.2150, 1.2200
Support: 1.2050, 1.2000, 1.1950
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