USD retreats after strong US GDP and jobless claims data
The US dollar index retreated after the US published the latest GDP and jobless claims numbers. The data revealed that the economy rose by 6.4% in the first quarter, helped by the $2.8 trillion stimulus package signed by Donald Trump and Joe Biden. The data showed that the country’s consumer spending, exports, and government spending increased during the quarter. Further data showed that the number of initial jobless claims dropped to 406,000 last week. The continuing jobless claims fell to 3.6 million, in a sign that the labour market is tightening. Additionally, durable goods orders fell by 1.3% in April after rising by 1.0% in March.
Global stocks were relatively mixed today. In Europe, the DAX and FTSE 100 indices declined by more than 0.25% while in France, the CAC 40 index rose by 0.55%. In Asia, the Shanghai composite rose while the Hang Seng and Nikkei 225 declined slightly. In the United States, futures tied to the Nasdaq 100 and S&P 500 declined while the Dow Jones. In Europe, the top mover was HSBC, which unveiled a plan to sell most of its US retail business. The bank is also considering exiting France. Meanwhile, Nvidia stock price declined in premarket trading even after the company published strong results helped by gaming and cryptocurrency mining. In the UK, miners like BHP, Rio Tinto, and Glencore rallied as commodity prices rose.
The price of cryptocurrencies attempted to bounce back after retreating during the overnight session. Bitcoin rose to $39,527 while Ethereum, Dogecoin, and Cardano rose to $2,800, $0.34, and $1.75. The coins are wavering as traders wait for the personal consumption data that will come out tomorrow. These are important numbers that tend to affect the Fed’s thinking. If the PCE data come out better than expected, it could push the Fed to change its thinking about tightening.
The GBP/USD bounced back as the US dollar retreated. The pair rose to a high of 1.4177, which was substantially higher than the intraday low of 1.4090. On the four-hour chart, the pair managed to move above the 25-day moving average. It is also above the ascending trendline that is shown in pink. It is also between the pink ascending channel and above the Ichimoku cloud. Therefore, the pair may keep rising as bulls target the next key resistance at 1.4220.
The EUR/USD pair retreated to a low of 1.2175 and then bounced back to a high of 1.2215. On the four-hour chart, the pair managed to move above the lower side of the ascending channel. It has also moved above the 25-day moving average. It is also between the middle and lower lines of the Bollinger Bands while the awesome oscillator has moved below the neutral line. The pair may keep rising as bulls target the upper side of the ascending channel at 1.2264.
The BTC/USD pair was little changed after falling in the overnight session. It is trading at 39,565, which is significantly above its lowest level last year. It is also slightly above the 23.6% Fibonacci retracement level and the 25-day and 15-day exponential moving averages (EMA). The Relative Strength Index has also formed a bullish divergence pattern. Therefore, the pair may soon have a bullish breakout.