Currency: EUR/USD
Resistance 2: 1.1100
Resistance 1: 1.1068
Spot price: 1.1022
Support bit 1: 1.0970
Support bit 2: 1.0930
On Friday (May 5), the euro fell as low as $1.0967 against the U.S. dollar, and then rebounded to $1.1026, up 0.11%. Both U.S. employment and wage growth in April beat economists’ forecasts on Friday, but March job growth was revised down. U.S. employers added 253,000 jobs in April, beating economists’ forecast of 180,000. Average hourly earnings rose 4.4% year-over-year, beating expectations for a 4.2% increase. However, March data was revised to show an increase of 165,000 jobs, compared with the previous value of 236,000. “Given this downward revision, the headline reading may not be as strong as it appears,” said UBS FX strategists. Investors are digesting the Fed, adjusting for expectations that the Fed may be at or near the end of its tightening cycle. The likelihood of the Fed cutting interest rates in the second half of the year. Still, while the economy is slowing, there are still areas of strength that are making investors hesitant to be bearish on the dollar for now. In the short term, it will be difficult to pick up much trading momentum until investors get clearer directional signals from US data. Although the European Central Bank still stated that it will continue to raise interest rates to curb inflation, its interest rate hikes have also begun to shrink, which has little effect on supporting and stimulating the euro. At present, the euro is still barely maintaining above 1.10 against the dollar, and technical indicators show signs of top divergence. If the euro continues to weaken below the $1.0909 and $1.0831 levels, it will confirm a short-term trend reversal, while a break below $1.0762 “will mean A more significant trend reversal is taking shape. If it goes up, 1.12 will be the initial target.
Currency: GBP/USD
Resistance 2: 1.2750
Resistance 1: 1.2652
Spot price: 1.2634
Support bit 1: 1.2550
Support bit 2: 1.2470
Last Friday (May 5), the pound rose against the dollar on Friday, approaching a one-year high of 1.2652. Sterling’s gains last week were largely boosted by the Federal Reserve’s meeting that week, when it raised interest rates by 25 basis points but said it might stop there. The Fed dropped some hawkish rhetoric from its statement this week, adding to the market’s view that this is the end of the U.S. rate hike cycle. Sterling has been taking advantage of this. By contrast, many analysts think the BoE will have to keep raising rates because UK inflation is much higher — 10.1% in March compared with 5% in the US. On the daily chart, GBP/USD continued to stay above the short-term moving averages, and technical indicators showed signs of starting to rise. It is expected that before the Bank of England interest rate meeting this week, the pound will be supported accordingly and will not fall. The current initial support for GBP/USD is at 1.2550 and further at 1.2470. Going up, the aiming area is initially between 1.2650-1.2750.
Currency: AUD/USD
Resistance 2: 0.6848
Resistance 1: 0.6800
Spot price: 0.6750
Support bit 1: 0.6700
Support bit 2: 0.6660
AUD/USD jumped to a two-week high of 0.6761 on Friday (May 5). The Australian dollar rose 1.8% last week, mainly supported by the Reserve Bank of Australia’s surprise rate hike on Tuesday and its quarterly monetary policy statement on Friday. In a statement, the RBA warned that inflation could be higher than expected given sluggish productivity growth, higher energy prices and higher-than-expected population growth leading to a surge in rents. The Reserve Bank of Australia reiterated in its quarterly monetary policy statement that it may have to raise interest rates further to curb inflation. The central bank raised interest rates for the 11th time to 3.85% as of last week, surprising the market. Analysts at ANZ expect the RBA to raise interest rates for the last time in August. Under the support of the expectation that the RBA will continue to raise interest rates, the AUD/USD took the opportunity to rebound. On the daily chart, the technical indicator RSI is advancing towards the overbought area, and the MACD signal line has formed a golden cross and is about to cross the zero axis, showing that the Australian dollar has rebounded quite strongly. The current initial resistance level above is at 0.6800. If it can cross this level, the Australian dollar will open up room to rise. The current strong support below is still at the 0.6600 level.
Wang Gang, Guangdong Branch, Bank of China
Opinions are personal and do not represent those of the organization