Home Forex Market Analysis FX Major Pairs, Dollar Index, and Gold Weekly Outlook

FX Major Pairs, Dollar Index, and Gold Weekly Outlook

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FX Major Pairs, Dollar Index, and Gold Weekly Outlook

EUR/USD: The euro extends gains against the US dollar ahead of EU CPI

The EUR/USD currency pair on Monday extended gains against the greenback heading into Tuesday’s preliminary CPI data. The currency pair surged to trade above the 76.40% fib level after breaking above 1.2200. 

The bulls will target profits at 1.2345 or higher at 1.2488 ahead of Tuesday’s data. They will also be looking forward to Friday’s EU retail sales data. 

The bears will target potential pullbacks at 1.2022 or lower at 1.1859. From the point of view of the US dollar, traders will be looking forward to Tuesday’s ISM Markit Manufacturing PMIs and Thursday’s Services PMI data. In addition, the non-farm payroll data for May will also be out on Friday.

EUR/USD chart

GBP/USD: Pound sterling targets new multi-year highs against the dollar

The GBP/USD has recently rallied to retest current multi-year highs of about 1.4228. The currency pair appears to have the momentum to go even higher in the coming days. However, this upward momentum could be put on hold depending on Thursday’s monetary policy hearings from the Bank of England. Before that, traders will look forward to Tuesday’s Markit Manufacturing PMI for May. 

The bulls will target profits at around 1.4250 or higher at 1.4300.  The greenback could receive a significant boost from the ISM Manufacturing and Services PMIs before the Jobs data comes out on Friday.

GBP/USD chart

USD/JPY: The USD struggles against the yen on strong Japanese factory outputs

The USD/JPY currency pair on Monday pulled back following the release of the latest Japanese factories data. Japan’s preliminary industrial production data for April beat the expected change of 3.5% (YoY) with a change of 15.4%, sparking a major decline in the USD/JPY pair.

However, this could change on Tuesday depending on the outcome of the ISM Manufacturing PMIs. The market is a little conservative with an expectation of 60.7, in line with the previous month. The bulls will target profits at around 109.766 or higher at 110.198. On the other hand, potential pullbacks will find support at 109.078 or lower at 108.735.

USD/JPY chart

USD/CHF: The dollar finds support at 100-hour MA against the franc

The USD/CHF currency pair on Monday pulled back to continue trading within a descending channel formation. The pair found strong support at the 100-hour moving average— holding strong just above 0.8975.

This could spark the next rebound in the currency pair. The greenback could be boosted by Tuesday’s ISM Manufacturing PMIs ahead of Wednesday’s ADP employment change and Thursday’s Services PMIs. There are a lot of data items to look forward to before Friday’s NFPs. Switzerland’s Q1 GDP and retail sales data for April could provide some boost for the Franc on Tuesday before the US data is released.

USD/CHF chart

DXY: The dollar index plunges to oversold levels ahead of key data

The US dollar index (DXY) on Monday plunged below the 100-hour moving average amid a relatively quiet period in the market. The US observed Memorial Day ahead of a very busy period.

Tuesday’s ISM Manufacturing PMIs will be followed quickly by the ADP employment change on Wednesday before Thursday’s Services PMIs and the jobs data on Friday. Therefore, the dollar index appears well set for a significant rebound should the data come in stronger than expected. 

The dollar index appears to be suffering from the news that the Federal Reserve may be preparing to start tapering. As a result, the bulls will target rebound profits at around 90.00 and 90.20. Key support levels can be found at around 89.60 and 89.40.

US dollar index (DXY)

XAU: Gold trends above 100-hour MA to top $1,910 on tapering news

The growing expectation of a Fed taper appears to be driving investors back to the safety zone of the yellow metal. The gold price (XAU/USD) on Monday continued to trend above the 100-hour moving average extending gains towards the $1,910 level.

Gold is now closer to crossing to the overbought levels of the 14-hour RSI. However, the upcoming data items could see the yellow metal pull back to the normal trading zone of the strength index indicator. The bears will target potential pullback profits at around $1,900 or lower at $1,890. The bulls will target short-term profits at $1,920 or higher at $1,930.

XAU/USD chart

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