End of the week currencies review

The week is closing in and it is really impressive the performance of USD during the last few days. More specifically, the USD Index started on Wednesday from the price area of 89.50 and it is currently moving at 90.36 (almost 1% up) and above the milestone price of 90. US Initial Jobless claims yesterday and Personal Income and Consumption today had solid results above expectations. A very important factor is also that president Biden plans to invest in infrastructure, education, health care, and more and push federal spending to its highest sustained levels since World War II. We have to wait and see if this bullish reaction of USD is sustainable or it is just a parenthesis.
EURUSD could not take advantage of its bullish starting and it has serious issues staying above 1.22. The support of 1.2050 is very important for the pair as it will define its direction, at least short term. The Business Climate and the Consumer Confidence announcements in Eurozone were positive but EURUSD is dominating by the strong USD today.

GBPUSD was very bullish yesterday, exceeding 1.42 but today it has returned to 1.4140 due to the strong USD and the concerns in the UK that a new lockdown is possible after the increased numbers of new cases because of the Indian covid variant offset. There are also some rumors about a hawkish Monetary Policy from the BoE that has not affected the pair so much, at least for now.
Remarkable is the weekly performance of USDJPY which managed to surpass 110 again (last time was at the beginning of April), having three bullish days after a Doji candlestick pattern on Tuesday (daily chart). JPY appears weak as the Japanese Unemployment Rate in April was at 2.8% instead of 2.6% in March and the Inflation in May is negative, at -0.1%. Strong USD can drive the pair to 111 very soon.
EURJPY is maybe the greatest performer of the week, so far. It currently makes 110 pips on a weekly basis. EURJPY has had a strong uptrend since the beginning of last November and during this period, the pair has performed more than 1,200 pips. The big target for the buyers is the strong resistance at 137.50 (the current price is 133.80).


Leave a comment