Key Economic Event Today
Dollar Index (DXY) – Daily Outlook
The U.S. President Donald Trump published a settlement with Mexico placing a hold on 5% taxes on Mexican products that had been set to go into influence on Monday. For now, it’s been left on hold. However, the dollar index is hit by worse than expected labor market figures from the last week. The USD was on the rear foot for most of last week ere taking a hard shove lower after Friday’s headline Nonfarm Payroll (NFP) published at 75K jobs versus a forecast of 177K new jobs.
It’s worth seeing that vital differences between the forecast and the actual headline figure issued from the U.S. Bureau of Labor Statistics are shifting commonplace. Previously, the forecast was within 40K of the actual headline number was September of last year.
Key Trading Level: 96.872
GBP/USD – Daily Outlook
Sterling was amongst the weakest players on Monday, hanging against the U.S. dollar to the 1.2650 area at one point, following a batch of .U.K. disappointing data. As per the official releases, economic growth declined in April by 0.4% as per the latest GDP forecast. Whereas, the Industrial Production also slipped by 1.0% vs. a forecast of 0.4% advance.
Manufacturing Production declined by 0.8% against the 1.3% market’s forecast.
Technically, the daily chart for the GBP/USD pair confirms that it ended just above a strongly bearish 25 and 50 EMA and that it remains well below the larger one, reflecting the limited buying interest.
Technical indicators in 4-hour and daily charts are suggesting to enter a bearish zone, while GBP/USD trades just below the 100-day EMA but above the 50 periods EMA at the 1.2700 area. The pair has short term support seen at 1.2650 and 1.2560.
A bearish breakout may extend the bearish pressure and open the way to the 2019 low at 1.2422. On the opposite direction, a break above 1.2760 is needed to ease the negative perspective, with 1.2830 in sight.
Key Trading Level: 1.2704
EUR/USD – Daily Outlook
The EUR/USD fell cloud on Monday and drew back from 1.1347; the highs hit last Friday. Lately, the signal currency euro soared piercingly against the U.S. dollar last week. Most of the buying was triggered due to a disappointing nonfarm payrolls report, which changed expectations over the Federal Reserve path on rates.
On the technical side, the EUR/USD is trading above the 2018-2019 downtrend following fresh dovish rhetoric from the U.S. Federal Reserve and relatively weak U.S. data. Overall, the technical side of the market hasn’t changed much as the EUR/USD pair settled over 1.1330, bullish according to the daily chart, as it advanced above its 100 DMA for the first time since mid-March, with the 200 DMA in the 1.1360 regions providing an immediate dynamic resistance.
Resistance territory can be found around 1.1450 and in case of violation, it could accelerate price towards 1.1520 prior structural resistance levels.
Key Trading Level: 1.1279