A QUIET START TO A BUSY WEEK
By looking at Monday’s economic release schedule, traders have very little to be excited about. However, that will quickly change later in the week as global data flows generate significant headlines.
There are no reports scheduled for release during European trade. In North America, a pair of Federal Reserve speakers could set the tone for monetary policy speculation throughout the week.
Federal Open Market Committee (FOMC) member, Loretta Mester, is scheduled to deliver a speech at 06:45 GMT. The Fed governor was part of the policy-setting committee that voted to keep interest rates on hold at the start of the month.
At 13:40 GMT, Federal Reserve Bank of St. Louis President, James Bullard, will deliver a speech to the fourth annual Consensus summit hosted by Coindesk. Consensus is the biggest blockchain event of the year. This year, more than 7,000 people are expected to attend, including representatives from government, industry and academia.
The economic calendar picks up on Tuesday with reports on Chinese retail sales, Eurozone Gross Domestic Product (GDP) and UK employment. In the United States, the Department of Commerce will report on retail sales for the month of April.
In currencies, the US dollar continued to trade near 2018 highs against a basket of six rivals, although gains have slowed in recent sessions. The greenback has gained more than 3% over the past month. Prior to the latest rally, the dollar had spent much of 2018 in the red.
Europe’s common currency is in the midst of an upward correction, with prices rebounding roughly 140 pips from last Wednesday’s swing low. EUR/USD is now valued at 1.1959, having gained 0.1% from the previous close. Though the downtrend remains intact, the currency pair could be poised for bigger gains in the near term as the greenback runs into fatigue. The bulls are eyeing a return to 1.2050 levels for confirmation of an uptrend. On the opposite side of the ledger, immediate support is located at 1.1880.
Cable is also in the midst of a correction, though price action remains choppy. GBP/USD bottomed at 1.3467 on Thursday but has since recovered to around 1.3560. UK employment data on Tuesday could provide the pair with the next major trading catalyst. At the time of writing, immediate support is located at the psychological 1.3500 level. On the opposite side of the spectrum, resistance is likely seen at 1.590.
The USD/JPY has backed off from its recent high, as the bulls failed to extend the rally toward 110.00 and beyond. The pair is now trading around 109.24, where it continues to trade within a predefined range of 108.80 and 109.60.