Let’s have a look at the economic calendar.
Weekly Forex Outlook: May 1-4
The US dollar managed to show the best weekly gains in 1-1/2 years. American currency was driven up by the increase in the US Treasury yields which made traders and investors close their bearish bets. Many pairs broke important long-term levels so that now we can expect new swings and probably even new trends. At the same time, it will be quite natural if the US corrected down after its rapid growth.
EUR/USD was falling under the influence of the European Central Bank’s meeting. The ECB policy hasn’t changed. Initially, the euro strengthened as the central bank’s president Mario Draghi praised the solid economic growth of the euro area, but then declined as it’s clear that the Federal Reserve will go far ahead of the ECB in tightening policy this year.
EUR/USD broke below the support line from 2017. The risks of further decline have certainly increased. A fix below the high of September 2017 at 1.2090 will be a bearish sign. On the downside, there’s a Fibo level at 1.2033 and supports at 1.1960 and 1.1915. Pullbacks to the upside will meet resistance at 1.2150.
The fall of the British pound versus the US dollar continued. British economic growth slowed down in Q1 to the weakest level since 2012. GBP/USD is vulnerable to further declines to 1.3700 and 1.3650 with the next support at 1.3520 (200-day MA). Resistance is provided by 100-day MA at 1.3860, 1.3900 and finally 1.40.
The first week of May will be interesting. May 1st will be a bank holiday in many countries of Europe. The United States will release some key economic indicators: ISM Manufacturing PMI on Tuesday, ADP Employment Report on Wednesday, ISM Non-Manufacturing PMI on Thursday and Nonfarm Payrolls and Average Earnings on Friday. Wednesday will also bring the meeting of the Federal Reserve, although no policy changes are expected. On Friday, NFP release will provoke a spike in volatility and will be followed by comments of the Fed members.
Important releases from other countries will include Canadian GDP and trade balance, New Zealand’s labor market figures, UK construction & services PMI.