Weekly Technical Analysis For May 7th to 11th, 2018EUR/USD: US Dollar bullish action has continued versus the Euro for three weeks. US Nonfarm payroll employment increased by 164K in April, which was little lower than estimates but still above the 135K jobs created in March. Average hourly earnings grew 0.1%, below expectations for a 0.2% increase. However, the unemployment rate edged down to 3.9%. It is the lowest US jobless rate since December 2000. After the data was released, the EUR/USD pair dropped to its lowest level in 2018 and then closed last week below the 1.1968 key resistance level.
In the upcoming week, the US CPI inflation will be significant for the market and it will be published on Thursday. The April’s customer price index is expected to come out at 2.5%, higher than a previous number of 2.4%. On the other hand, Core CPI inflation is expected to rise to 2.2% from 2.1% a month earlier. In the last week, the Fed signaled that inflation was nearing its 2% target. Acceleration in headline inflation may prompt investors to price further rate hikes from Fed in the June Meeting.
Additionally, we will focus on the worlds two biggest central banks chairs speeches this week. The Fed Chair Powell will speak at the High-Level Conference on the International Monetary System in Zurich on Tuesday. The ECB President Draghi will give a speech at the 8th edition of The State of the Union in Florence on Friday.
As long as the EUR/USD pair stays below 1.1968 on a four hourly basis, the bearish action will continue and we will see 1.1884 and 1.1812 as support levels. On the other hand, if the pair goes above 1.1968, the daily resistance level can be found at 1.2053
Support: 1.1884 – 1.1812 – 1.1768
Resistance: 1.1968 – 1.2053 – 1.2109
GBP/USD: The Bank of England will announce its rate decision on Thursday. The market expects the BoE keeps unchanged their benchmark interest rates at 0.5%. Also, note though that no change is expected in either the bank’s £435 billion government bond-buying or its £10 billion corporate bond purchases. However, a surprising revision would lead to a volatility in GBP/USD.The US Dollar has extended gains versus the Pound for three weeks. If the price stays below 1.3536, on a four hourly basis, we will face 1.3447 as a daily support level. On the other hand, if the price rises above 1.3536, the resistance level will be at 1.3652.
Support: 1.3536 – 1.3447 – 1.3338
Resistance: 1.3652 – 1.3745 – 1.3880
USD/JPY: The USD/JPY currency found sellers from the resistance level of 109.90 last week and then showed a downward movement. As long as the price trades below the 109.35 main resistance level on a daily basis, the bearish action may continue and we will see 108.78 and 107.65 as support levels. On the other hand, if the price goes beyond 109.35, the next resistance level is holding at 109.90 again.
Support: 108.78 – 107.65 – 106.46
Resistance: 109.35 – 109.90 – 110.86
GOLD: The GOLD downward movement was limited at the daily support level of 1307 last week. As long as the precious metal stays above 1307 on a daily basis, we will see resistance levels at 1319 and 1330. On the other hand, if the price drops below 1307, the next support level can be found at 1291.
Support: 1307 – 1291 – 1283
Resistance: 1319 – 1330 – 1352