End of the week currencies review

 

The week closes in with ECB’s President Lagarde speech who stated that “The recovery is uncertain and given the uncertainty, divergence, supportive policies remain necessary for months to come”. This sounded like a sign to the markets that the ECB will continue a loose Monetary Policy for the following months and caused a drop for EURUSD to the price area of 1.22. On Wednesday, the FOMC Minutes revealed that some policymakers are very skeptical regarding US Inflation and that the US economy is still far from the Unemployment Rate and the Price Stability targets. The USD Index had important profits on Wednesday but almost right away turned to its bearish trend, breaking out the price of 90 again.
EURUSD is still bullish by the end of the week and this is a result of many fluctuations and high volatility. Eurozone’s and Germany’s PMIs announcements were mixed but the pair is currently dropping mostly due to Lagarde’s speech. The weekly open price was at 1.2144, still far away from the current price circa 1.22 so most likely the week will end up bullishly.
GBPUSD keeps on rising after Wednesday’s drop, caused by FOMC and it is currently moving around 1.42. UK Retail Sales and PMIs were not bad at all and GBPUSD is now very close to its major resistance at 1.4240. This resistance leads to a 3 years high price so some pullbacks are possible enough.
USDJPY has a bearish week so far, despite the temporary bullish reaction on Wednesday, after FOMC Minutes. Bond yields are also in a small decline but JPY appears strong as well after the positive news in Imports/Exports in Japan. USDJPY attempted to approach the milestone price of 110 for three consecutive weeks with no success.
EURJPY started the week by continuing its long-term bullish trend but now it is trading exactly at the weekly open price. If things remain the same in the following hours we’ll have a bearish Doji candlestick pattern which is also fundamentally confirmed through weak EUR (after the speech of Lagarde) and strong JPY.
USDCAD cannot still escape from a long-term downtrend that started about 14 months ago. On Wednesday, the pair reacted up to 1.2140 but after oil price recovery and the positive announcements in Canada (CPI and Retail Sales were better than expected), it turned to the south again.
AUDUSD is pretty quiet this week with low volatility, trading into a tight range of 100 pips. Earlier today, Australia released the Retail Sales in April at 1.1% vs 0.5% expected while CBA Manufacturing PMI was positive as well but the pair is below its weekly opening price which may sound like a sign of weakness for AUD.

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