The US dollar was on the back foot throughout most of the week as data remained mixed and speculation about the Fed decision mounts. A rate decision in Australia, the ECB’s critical decision and the UK elections stand out in the first full week of June. Fed members sent mixed messages. It seems that they are trapped in the expectations they created for a June hike, but they may make it a “dovish hike”. Their favorite inflation figure continued falling. In the UK, some opinion polls showed a tightening of the race, causing the pound to slide. But not polls are equal and the only that counts is the vote coming this week. Reports about an upgrade to the ECB’s assessment helped the euro, winning over weaker inflation. Commodity currencies resumed their falls as China’s PMI slipped to contraction territory and oil prices are grinding lower.
US ISM Non-Manufacturing PMI: Monday, 14:00. Most of the US economy is in the services (non-manufacturing) sector. The publication usually serves as a hint towards the Non-Farm Payrolls. This time, the sting is gone, but the report still has merit on its own. Back in April, the score beat expectations with 57.5 points. A score of 57.3 is predicted now.
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US ISM Non-Manufacturing PMI
- EURUSD
As could be seen on the chart above that the pair is traded below a strong resistance level around 1.1300. It also matches a Fibonacci level of 0.386 (From 14.10.2014 to 03.01.2017). So, we believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 1.1200 followed by 1.1100 during the week. On the other hand, if the level of 1.1300 is broken (by at least a daily close) then the way would be open for the pair to reach 1.1400.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 1.1275 ▪-1.1300 ▪ 1.1350 |
▪ 1.1200 ▪-1.1150 ▪ 1.1100 |
We remain bearish as long as the pair is traded below the level of 1.1272. |
- GBPUSD
As could be seen on the chart above that the pair is traded right above a strong support level that could be found at 1.2750 so we believe that as long as the pair is traded above it, it is highly recommended to go long targeting the level of 1.3000 during the day. In case that the level of 1.2750 is broken, then the way would be open for the pair to reach the level of 1.2700 followed by 1.2600.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 1.3000 ▪-1.3100 ▪ — |
▪ 1.2750 ▪ 1.2700 ▪ — |
We remain bullish as long as the pair is traded above the level of 1.2750 |
- GOLD
The Gold managed to reach the downtrend line shown on the chart above. We believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 1250 during the day. This is conditioned by the continuation of trading below the downtrend line. On the other hand, if the pair managed to break through the downtrend line, then this would be very bullish for the Gold that it might reach the level of 1300 during the week.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 1350 ▪ 1300 ▪ 1290 |
▪ 1250 ▪ 1220 ▪ 1200 |
We remain bearish as long as the pair is traded below the downtrend line. |
- AUDUSD
As could be seen on the chart that the pair went up once it touched the uptrend line shown on the chart in red. It may continue going up to reach the level of 0.7500 then there would be two scenarios: if the pair respects this level, then it may go down targeting the level of 0.7400. The second scenario: if the pair breaks through the level of 0.7500 then it may go up to reach the level of 0.7600.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 0.7500 ▪ 0.7600 ▪-0.7700 |
▪ 0.7350 ▪ 0.7300 ▪ 0.7250 |
We remain bearish as long as the pair is traded below the level of 0.7500. |
- GBPJPY
As could be seen on the chart that the pair may continue going down to reach the uptrend line shown on the chart. This is not really a negative movement. This can support the strength of the GBP against the JPY. Let’s see what will happen.
| Resistance levels: | Support levels: | Recommended: |
| ▪ 144 ▪ 145 ▪ 146 |
▪ 142 ▪ 141 ▪ 140 |
We remain bearish as long as the pair is traded below the level of 144. |
