USD finds strength against its majors

Wednesday's trading saw the largest pip move in the GBP/USD which dropped 77 pips to 1.2257. Here is what to keep an eye on.

Downtrend 2

USD finds strength against its majors

The US Dollar was bullish against most of its major pairs on Wednesday with the exception of the EUR. 

On the economic data front, the Mortgage Bankers Association's Mortgage Applications increased 2.7% for the week ending May 22nd, from -2.6% in the prior week. The U.S. Federal Reserve released its Beige Book, which stated economic activity declined in every district, employment continues to decline and weak demand is weighing on selling prices. Although the Fed expressed high hopes for swift recovery, it remarked that the outlook is still highly uncertain. 

On Thursday, GDP for the first quarter second reading is expected to remain at -4.8% on quarter, in line with the first quarter advanced reading. Durable Goods Orders for the April preliminary reading are expected to decline 19.3% on month, from -14.7% in the March final readings. Initial Jobless Claims for the week ending May 23rd are expected to fall to 2,100K, from 2,438K in the previous week. Finally, Continuing Claims for the week ending May 16th are expected to rise further to 25,500K, from 25,073K in the week before.                                                                       

The Euro was bullish against all of its major pairs. In Europe, EU Commission has announced it will mobilize 750 billion euros for European recovery. France's INSEE has released May indicators on consumer confidence at 93 (vs 92 expected), business confidence at 70 (vs 69 expected) and manufacturing confidence at 70 (vs 85 expected).

The Australian dollar was bearish against all of its major pairs. 

Wednesday's trading saw the largest pip move in the GBP/USD which dropped 77 pips to 1.2257. The pair made a late day recovery from the 1.2205 lows. The bias remains bearish with resistance at the 1.2275 level. Traders looking to short the pair may want to consider 1.223 and 1.2205 support levels as targets to the downside. 



Source: GAIN Capital, TradingView

Happy trading.

More from USD

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.