The week was positive for the greenback. The US dollar index managed to set new highs near $93.50.
Weekly Forex Outlook: April 2-6
The US dollar recovered from the bottom of the range, in which it has been trading since the end of January.
There were some positive factors for the greenback. Firstly, concerns over global trade protectionism eased. Secondly, there was some progress on North Korea’s nuclear program. Plus, investors closed their USD short positions ahead of the end of the quarter.
Of course, as the new quarter begins in April, the USD will no longer have the support of monetary inflows, so it remains to be seen whether the American currency is able to continue strengthening. Pay attention to the technical levels of the USD index: resistance is at 90.50 and support is at 88.20.
USD/JPY rose from 104.60 to 107.00. The pair may rise to 107.60 and 108.50 especially in case of the weekly close above 106.00.
GBP/USD made a pullback down. Notice that there’s a strong resistance at 1.4270 – it’s a 200-week MA. The last time the pair traded above this line was in 2014.
EUR/USD keeps meeting resistance at 1.2450/1.2500 ahead of 1.12550. it’s not likely that the situation will change in the coming days. Focus on support at 1.2200, although a break lower would take some really good news from America.
Britain will release manufacturing PMI on Tuesday.
On Wednesday, await Australian retail sales, the UK construction PMI, euro area’s flash inflation for March, US ADP employment report and ISM services PMI.
Thursday will bring AUD trade balance, GBP services PMI and Canada’s trade balance.
Finally, the first Friday of April, so the US will release NFP, average earnings, and unemployment rate.
The pound is highly volatile after a Brexit referendum. Have a look what other factors affect the UK currency. And get clues on future movements of GBP.
This is Forex trading plan for Thursday, May 24…
It seems like the rally of the greenback has ended. On Monday, the US dollar index tested levels near $94, however, closed below $93.50.