Euro gained heavily with the market focusing on the USD. Gains in the Euro led the market higher with EUR/AUD and EUR/GBP also making solid gains. May EU PMI’s were slightly better than expected at 44.7 vs. 43.8 previously. The Euro is the second largest currency in the world and any threat to the USD will result in substantial gains for the single currency. Sterling had a very volatile day crashing after the S&P put the UK on negative watch. The pair found support at 1.55 and rebounded for the rest of the day to touch fresh week highs just below 1.5900. UK business investment fell 5.5% in Q1. . Looking ahead, Q1 GDP is forecast at 1.9%.
Technical Outlook:
EURO R1: 1.4035 S1: 1.3820
R2: 1.4040 S2: 1.3780
Chart pattern shows a range bound movement for the day. With the trading range of 1.3830 -1.4020 levels for the day. Stochastic and momentum are seen trending down but caution required as market is trading above the moving average and parabolic is also supporting bull note.
GBP R1: 1.6000 S1: 1. 5760
R2: 1.6020 S2: 1. 5740
Chart pattern is expected to be on a bullish note. With the trading range of 1.5780-1.5980 levels for the day. Stochastic and momentum are seen trending up though in overbought area . Currency is also trading above the moving average and Parabolic is also supporting the bullish note.
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