Let’s have a look at the economic calendar.
Weekly Forex Outlook: May 28 - June 1
The US traded in the positive territory but had trouble with moving much higher. The minutes of the last meeting of American central bank was not very positive for the USD because the central bank wasn’t in a hurry to raise rates. If we look at the chart of the US dollar index, you will see that there’s resistance at 94.13 – 38.2% Fibonacci retracement of 2017-2018 decline.
US President Donald Trump canceled a summit with North Korean leader Kim Jong Un. This can have a negative impact on relations between the United States and China. Bad news for market’s risk sentiment, although the situation improved a bit after North Korea said it was still open to resolving issues with the United States.
The last trading week of May will be lively. The Bank of Canada will meet on Wednesday. Analysts expect the regulator to keep rates unchanged but make 2 rate hikes in the second half of the year. Canada will also release GDP on Thursday, while Australia will publish private capital expenditure figures. Friday will bring Britain’s manufacturing PMI as well as US Nonfarm Payrolls – a release which usually causes great moves of the market.
Oil fell as could pump more stimulus into Britain’s economy if this year’s Brexit negotiations result in a bad deal. Have a look at the chart of WTI – it fell to the middle of the channel and may get even lower – to $66 a barrel.
The decline of the euro continued. Italy’s debt outlook weighed on sentiment and German PMI data fell to a 20-month low in May. Accounts of the last meeting of the European Central Bank showed that it is worried. A close below 1.1680 will bring EUR/USD to 1.1590, 1.1550 and 1.1435. Various concerns may drive EUR/CHF lower, to 1.1475 and 1.1400.
Worries over Brexit and further signs of weakness in Britain’s economy hit the pound. GBP/USD left its previous range and made a move down. The country’s GDP rose only by 0.1% in the first 3 months of the year. This is a very low growth. Bank of England’s Governor Mark Carney said that the Brexit vote has cost each UK household 900 pounds and that could pump more stimulus into Britain’s economy. As a result, our forecast for the British currency is negative. A fall below 1.33 will open the way down to 1.3250 and 1.3180.
The market sentiment improved based on an ease of the trade war tensions between China and the US.
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Watch and find out the key levels for EUR/USD, GBP/USD and NZD/USD for today!