Last week the Dollar finished mixed against the majors as investors ignored fundamental guidance in favor of waiting for the bigger picture to become clearer, thereby putting pressure on the Dollar. Generally, economic data and earnings over the past week has not been promising. NASDAQ and Dow Jones rose by 1.05% and 0.99% respectively, crude declined by 0.48% to close at $78.84 a barrel, and gold (XAU) also declined by 0.48% to close at $1188.85 an ounce. Today, New Home Sales data is expected at 317K vs. 300K prior.
The Euro strengthened slightly versus the Dollar and most majors, approaching the monthly highs again as EU stress tests showed relative stability and resistance in the banking system. Together with the release of better than expected economic data, investors are regaining confidence in Europe’s chances to avoid a double dip recession. Overall, EUR/USD traded with a low of 1.2792 and a high of 1.2964. No economic data is expected today.
The Pound rose against the Dollar and all majors after the Prelim GDP came out higher than expected at 1.1% vs. 0.6%, with encouraging sentiment from the EU region giving tailwind. The trend for the GBP/USD remains bullish, with the next resistance ahead at 1.55 levels. Breaking these levels up will be the trend’s real test this week. Until technical signs of reversal appear, the momentum remains positive, as it has done for weeks. Overall, GBP/USD traded with a low of 1.5250 and a high of 1.5447.
The Yen weakened versus majors as risk appetite grows around the world and speculation among investors that the BOJ will ease monetary policy rises. The daily trend remains bearish, with support at 86.25. Overall, USD/JPY traded with a low of 86.71 and a high of 87.49.
The Canadian Dollar rallied against most currencies as Canadian overnight interest rates rose to 0.75% last week, making Canada the first G-7 country to raise its rates in June. Policy makers stated they expect Canada’s economic activity to return to full capacity by the end of next year. The pair’s key support levels are located around 1.0350 on the hourly chart, and current price levels are facing 200-day SMA support. Overall, USD/CAD traded with a low of 1.0345 and a high of 1.0437.
