Home Forex Market Analysis FX Majors, Dollar Index, Gold, and Oil — Weekly Outlook

FX Majors, Dollar Index, Gold, and Oil — Weekly Outlook

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FX Majors, Dollar Index, Gold, and Oil — Weekly Outlook

EUR/USD: The euro loses steam against the dollar ahead of US retail sales

The euro-dollar currency pair (EUR/USD) started to pull back on Monday ahead of Tuesday’s US retail sales data. On Monday, the EU manufacturing data failed to rally the currency pair. The pair edged lower although industrial production from the EU zone for April outperformed the expectations. 

More importantly, traders will be looking forward to Germany’s inflation data on Tuesday with consumer prices expected to maintain a steady growth of 2.4% on a Y/Y basis. Later in the week, the EU will release inflation data while the US will give an update on the monetary policy and economic outlook. US interest rates are expected to remain unchanged at 0.25%.

EUR/USD chart

Technically, the EUR/USD currency pair appears to have recently pulled back after finding resistance at the 1.2244 level. The currency pair remains pinned within an ascending channel formation in the daily chart.

The bulls will target profits at around 1.2244 or higher at 1.2397. On the other hand, the bears will look to pounce on pullbacks at 1.1955 or lower at 1.1803.

GBP/USD: Sterling struggles to break above 1.4250 ahead of UK claims data

The pound sterling on Monday struggled to break above the resistance level at 1.4250 against the US dollar ahead of Tuesday’s claimant count data. The GBP/USD currency pair pulled back to trade around the 1.4100 level, off last week’s close.

Traders will also be looking forward to the unemployment rate on Tuesday ahead of Wednesday’s inflation data and retail sales data on Friday.

GBP/USD chart

Technically, the GBP/USD currency traders can target bullish profits at around 1.4250 or higher at 1.4428. On the other hand, the bears can target extended pullbacks at around 1.3953 and 1.3779.

USDJPY: US dollar extends rebound against the yen ahead of key data

The greenback extended last week’s gains against the yen on Monday. Japan’s manufacturing sector impressed after April’s industrial production data outperformed the expected year-over-year growth of 15.4% with 15.8%. 

Traders will be looking forward to Wednesday’s imports and exports data ahead of Friday’s inflation data and the Bank of Japan’s monetary policy update.

USD/JPY chart

Technically, the USD/JPY is trading within an ascending channel formation in the daily chart. The pair recently rebounded to resume the rally after going through a sharp pullback. It is closer to the overbought levels of the 14-day RSI. Another pullback could be imminent.

The bears will target potential pullbacks at 108.359 and 106.915. The bulls will look to extend the long-term rally towards 111.490 and 112.883.

USD/CHF: The greenback targets channel breakout against the franc

The US dollar bounced back against the Swiss franc on Monday ahead of Tuesday’s US retail sales and Wednesday’s FOMC conference. The US retail sales control group data is expected to come in stronger than the previous month while general retail sales could be weaker.

Swiss franc enthusiasts will be looking forward to the Swiss Nationational Bank’s monetary policy statement and the interest rate decision on Thursday.

USD/CHF chart

Traders can target bullish profits at around 0.9070 or higher at 0.9171. On the other hand, the bears can target pullbacks at 0.8898 or lower at 0.8805.

DXY: The dollar index looks to extend gains after finding support

The US dollar currency index could receive a significant boost from Tuesday’s retail sales data. The all-important retail sales control group is expected to be flat compared to the previous month’s decline of 1.5%. Any change above -0.6% could boost the DXY.

DXY chart

Optimistic traders can target profits at around 91.497 and 92.625. On the other hand, the bears can target their short for profits at 89.421 and 88.400.

XAU/USD: Gold finds trendline support amid on-risk trading

With positivity returning to markets and the latest US data boosting stock prices, investors have shifted back towards on-risk trading. This affects the price of gold negatively and it is demonstrated by the pullback in the price of gold over the last few weeks. The XAU/USD could decline further depending on Tuesday’s retail sales data.

XAU/USD chart

Technically, the XAU/USD remains pinned within an ascending channel formation in the daily chart. The latest pullback pushed the gold price to retest the trendline support. This sets the yellow metal for a potential rebound.

Gold bulls can target rebound profits at around $1,919 and $1,987. On the other hand, the bears can target extended pullbacks at $1,792 and $1,722.

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