The dollar traded lower against almost all of its G10 counterparts during the European morning Tuesday, ranging from -0.20% against GBP to -0.60% vs NOK. The greenback was higher against NZD, while it was unchanged vs CAD and JPY.
EUR started strengthening after Spain’s registered unemployed dropped in May, adding to the recent positive data from the peripheral economy. Later, the Eurozone’s preliminary CPI rose 0.3% yoy in May from 0.0% yoy previously, exceeding expectations of +0.2% yoy. After four months in deflation, it seems that the stimulative measures announced by the ECB are starting to have some positive impact. EUR/USD rose to find resistance near the psychological hurdle of 1.1000, but I would be skeptical about further advances as the short-term momentums show a decelerating upside movement.
The pound strengthened after Britain’s construction PMI rose to 55.9 in May from 54.2 previously, beating expectations. Following the soft manufacturing PMI on Monday, the positive surprise eased concerns over growth in Q2 and strengthened GBP somewhat.
AUD/USD traded higher on Tuesday breaking above the resistance-turned-into-support of 0.7660 (S1). The surge came following the RBA meeting, where the Bank kept rates steady and presented a neutral bias. Nonetheless the price structure on the 4-hour chart still suggests a short-term downtrend. I think it would take a clear and decisive dip below the support at 0.7600 (S2) to open the way for our next support at 0.7560 (S3). Our short-term momentums support the halt of the advance. The RSI found resistance at its 50 line and point sideways, while the MACD already below zero, show sign of topping and could turn down again. As for the bigger picture, a drop below 0.7500 is needed to print a lower low on the daily chart and to assure us that the longer-term downtrend is regaining momentum.
• Support: 0.7660 (S1) 0.7600 (S2), 0.7560 (S3).
• Resistance: 0.7760 (R1), 0.7800 (R2), 0.7870 (R3).
Preparado por: Marshall Gittler, Charalambos Pissouros y Sakis Paraskevov