Last week Recap: The US dollar continued its losses last week, recovered a bit by the end of the week, the most critical U.S event we witnessed last week was nonfarm payrolls, the indicator rose from 126 K to 223 K alsomst around the forecast 224 K. This development could advance the US dollar a little bit the upcoming days, however; If we take a quick look at the weekly chart of the US dollar index, the pair faces a strong challenge in the upcoming days (weeks).
The US dollar index continued its bearish momentum last week, printed resistance at the 96.08 levels. This development leaves the pair targeting the 92.00 levels, a halt is likely, but a cut would open 89.75 next, further down will open the 88.00 levels.
On the upside, a failure to hold losses below the 93.95 levels could mean a return to the 96.08 levels, a halt is likely, but sustained breakout-weekly closing- above the 96.08 levels will restore the upside momentum and pave the way towards the 100.00 levels.
In all, as long as 96.08 resistance holds on a weekly closing basis, medium term outlook in USDINDEX remains on the downside towards the 92.00 levels ahead of the 89.75 levels, above 96.08 sees a rebound risk towards the 97.15/100.80 levels.
Support and resistance levels: 89.80, 92.00, 93.95 (main), 96.08 (main), 97.15, 100.25, 100.63
UK General Election: Last week, we also witnessed a critical event from the United Kingdom, the cable jumped towards the 1.5500 levels on the day of election as expected before, however; I still see 1.5498/1.5551 as strong resistance and strong rebound still in sight.
Next Week: we have a lot of critical events, Monday: we have the Bank of England Interest Rate Decision (May), I think this meeting will decide the next destination for GBPUSD pair, On Tuesday, the UK will release data on Manufacturing Production, later on Wednesday will release also data on Claimant Count Change
On the EURO side, we have Eurogroup Meetings on Monday, On Wednesday we have the highest importance German Gross Domestic Product for the first quarter of 2015. Later in the day EURO Zone will release data on Gross Domestic Product (GDP).
From United States: The most critical event that needs to be watched is Retail Sales data on Wednesday (keep an eye on USDINDEX near support and resistance levels). (Negative data below resistance level is likely to bring fall resumption).
Let’s highlight the most critical events which may affect currency market next week:
- AUD NAB Business Confidence. Monday at 01:30
- Eurogroup Meetings. Monday: All day.
- Bank of England Interest Rate Decision (May). Monday at 11:00
- U.K Manufacturing Production m/m. Tuesday at 08:30
- Reserve Bank of New Zealand (RBNZ) Gov Wheeler Speaks. Tuesday at 21:05
- Chinese Industrial Production y/y (Apr). Wednesday at 05:30
- German Gross Domestic Product (GDP) q/q. Wednesday at 06:00
- U.K Claimant Count Change. Wednesday at 08:30
- Euro Zone Gross Domestic Product (GDP). Wednesday at 09:00
- Bank of England Quarterly Inflation Report followed by Gov Carney Speaks. Wednesday at 09:30
- U.S Core Retail Sales m/m. Wednesday at 12:30
- U.S Retail Sales m/m. Wednesday at 12:30
- U.S Crude Oil Inventories.Wednesday at 14:30
- NZD Retail Sales q/q. Wednesday at 22.45.
- U.S Producer Price Index (PPI) (Apr). Thursday at 12:30
- U.S Initial Jobless Claims. Thursday at 12:30
- Canadian Manufacturing Sales m/m. Friday at 12:30
- U.S Michigan Consumer Sentiment (May).Friday at 14:00
*All Times Are GMT
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