By CountingPips.com
The US dollar has been on the retreat against the other major currencies in foreign exchange trading on Thursday May 23rd after rising on Wednesday. So far this morning into the New York trading session, the dollar has been on the defensive against the euro, British pound sterling, Japanese yen, Swiss franc, Canadian dollar and the New Zealand dollar while trading close to unchanged against the Australian dollar.
The dollar has been on a roll so far in May and has reached multi-month highs against many of the major currencies such as the Aussie dollar, kiwi dollar, franc and the Canadian dollar while also marking a 4-year high versus the Japanese yen in Wednesday’s trading.
Economic Events:
In fundamental news today, the UK first quarter GDP rose at 0.3% in line with expectations while US initial jobless claims fell more than expected at 340K filing for jobless benefits and new home sales rose by 2.3% in April. Out of China, PMI data fell to a 49.6 reading which surpassed forecasts that had expected a 50.4 score for May.
Currency Pair Levels:
Euro/US dollar: The euro has risen on Thursday after a fluctuating day on Wednesday that saw the pair reach almost all the way to 1.30 before closing at a lower level. The pair in trading today has made it to the 1.2900 level after finding support around 1.2850 area. This pair is in consolidation mode as we have seen trading mainly stay within the 1.2800 to the 1.2930 range since May 15th. We would need to see a close above the 1.29 level for further upside momentum while a close below the 1.2830 to the 1.2850 area could signal further selling momentum.
British pound/US dollar: The British pound has been slightly higher today in trading after two straight days of sharp decreases. This currency pair almost reached the major psychological level of 1.50 today before finding support around the 1.5015 level. The 1.5100 area are present upside resistance while the 1.50 level is a major focus on downward momentum.
US dollar/Swiss franc: Swiss franc has been to a sharply lower throughout the month of May against the dollar with the American currency reaching its highest levels since July 2012. Today the USD/CHF has come off the highest levels to trade under the 0.9700 level while finding support at 0.9650. For today’s levels, a close above the 0.9700 price would keep the 0.9750 level within reach to continue upward momentum while on the downside, the 0.9650 level present support before the 0.9550 area comes into play.
US dollar/Canadian dollar: This currency pair has this week saw its highest level since June 2012. Currently prices are above the previous support and resistance level of 1.0330 area and it will be worth watching where this week’s chart closes. Close above the 1.0330 level would perhaps signal a breakout above the wedge pattern that has been in place for quite some time now on the weekly charts. Levels to watch on the downside are 1.0300 and then 1.0250 with upward momentum likely running into resistance at this week’s high around 1.0400.
Australian dollar/US dollar: The Aussie has fallen this week for a third straight week so far but has found support below the 0.9650 area and we look for perhaps more consolidation in the days to come. Levels I’m watching right now are 0.9735 on the upside resistance with any fall below 0.9650 signaling a continuation of the downtrend.
New Zealand dollar/US dollar: The Kiwi is in much the same situation as the Australian dollar with this pair having found support this week at 0.8050. Resistance levels above include 0.8160 and then the round number of 0.8200 while a close below 0.8500 to open up the lower levels towards the 0.7985 area.
US dollar/Japanese yen: The dollar has been sharply lower today after reaching a new highest level since 2008 in yesterday’s trading. The 102 level is a threshold to watch for further resistance in the event of upside momentum while the 100.80 area presents potential support before any possible return to the psychological major level of 100. Daily chart below shows today’s selling of the dollar while the MACD indicator is signaling an imminent crossover, perhaps forecasting a change in short-term trend.
Written by Zac Storella, CountingPips Forex Blog
