Let’s find out what has been moving the market today…
Trading plan for May 22
Last week was highly positive for the US dollar, so, it managed to end the Friday’s trading above 93.50. However, the beginning of this week is not so encouraging for USD. The US dollar index tested levels near $94, but couldn’t stick there and fell to $93.60. No notable data are anticipated to be released on Tuesday. As a result, only political news will be able to support the greenback. The trading is not extensive, however, if the greenback is not able to recover, other currencies will get a chance to appreciate against it.
The pound is still falling. Tuesday will be an important day for the UK currency. Inflation report hearings will be released at 12:00 MT time. More hawkish sounding outlook on economic conditions and inflation will support GBP. Moreover, the next round of Brexit talks will start on Tuesday. As news on the Brexit deal was highly uncertain, there are risks for the pound. GBP/USD tested the support at 1.34, however, managed to rebound as the US dollar started declining. The pound is trading within 1.34-1.35. If GBP/USD closes below 1.34, there is a risk of the further movement to 1.3350. On the other hand, if Tuesday’s events are encouraging for the pound, it will be able to reach the resistance at 1.35.
Trade war’s tensions eased. The US and China agreed to put tariffs on hold. Furthermore, China plans to significantly increase imports from the US. As a result, the Australian dollar managed to recover. The Australian dollar/US dollar pair rebounded from the pivot point at 0.75. Up to date, the pair is moving to the resistance at 0.7565. If it is able to close above this level, the next aim is at 0.7620. However, no important economic data for the Australian dollar are anticipated to be out in next few days, so, there is a risk that the pair will continue to trade within 0.75-0.7565.
Thank you for your attention!