Let’s find out what has been moving the market today…
Trading plan for May 31
US dollar experienced a correction. The USD index ran into resistance at 95.00 and may form a bearish engulfing if it closes below 94.34. American GDP growth in the first three months of the year was slightly revised down from 2.3% to 2.2%. ADP employment report also disappointed.
German retail sales and inflation, on the other hand, turned out to be higher-than-expected. EUR/USD recovered from 1.1535. The single currency got support from the news that Italian politicians are trying to resolve the political crisis and avoid a new election. If the pair closes above 1.1620 on Wednesday, a bullish engulfing pattern will form on the daily chart allowing a recovery to 1.1675 and 1.1700. In this area, the euro will meet resistance of a downtrend line.
As expected, the Bank of Canada left monetary policy unchanged but was less dovish. USD/CAD slid to 1.2900. Below this level, the next downside target will be at 1.2813.
Resistance for NZD/USD lies at 0.6980, while AUD/USD has to overcome 0.7550 to get the strength to get to 0.7600.
On Thursday, the highlights will be ANZ business confidence in New Zealand, private Capital Expenditure in Australian flash CPI in the euro area, Canadian GDP, and US core PCE price index.