The dollar is under pressure before key U.S. data is released

After Wednesday's oscillation, the US dollar (USD) has difficulty finding demand for the European session starting on Thursday. The European Economic Calendar will revise the euro zone's GDP growth data for the first quarter. Later in the day, market participants will closely monitor U.S. producer price index (PPI), retail sales and weekly initial jobless claims figures. In addition, Fed Chairman Jerome Powell will speak on the Fed’s framework review at the Thomas Laubach Research Conference in Washington, D.C.

After a sharp decline in the first half of Wednesday, the U.S. dollar index reversed its direction during the U.S. session, with little change at the close of the day. Earlier on Thursday, the U.S. dollar index continued to fall to 100.50, down more than 0.3% on the day. Meanwhile, U.S. stock index futures fell between 0.3% and 0.5% in early European trading, reflecting cautious market stance.

Basic foreign exchange market trends:

Earlier that day, data from Australia showed that the unemployment rate in April was stable at 4.1%, in line with expectations. During this period, employment changes were +89K, while market expectations were +20K. After closing in the negative territory on Wednesday, the AUD/USD held its ground and rose slightly to 0.6450 on Thursday.

The UK National Statistics Office reported on Thursday that GDP grew at an annual growth rate of 1.3%. The data follows a 1.5% increase in the previous quarter, better than the market's expectations of 1.2%. FromOther data from the UK show that industrial production and manufacturing production contracted by 0.7% and 0.8% month by month in March, respectively. GBP/USD gains traction during the European session and trades in the positive zone around 1.3300.

Euro/USD gained traction after a slight decline on Wednesday and traded above 1.1200. In addition to GDP correction, the EU Statistics Office will also release first-quarter employment changes and industrial production data for March. Several European Central Bank (ECB) policymakers will speak later that day.

After two consecutive days of declines, the US dollar/JPY still faces bearish pressure, falling below 146.00 on Thursday, the European session fell by more than 0.5%. The Japanese cabinet office will release first-quarter GDP data in early Asian trading on Friday.

Bulle market fundamentals:

Gold hit its lowest level since April 10 in the early trading session, falling below $3,150, down nearly 1% on the day. Easing of geopolitical tensions appears to be suppressing precious metals. U.S. President Donald Trump said Thursday they were very close to reaching a nuclear deal with Iran, adding that India has offered the U.S. a “basically zero tariff” trade deal.

Analysis of major currency trends:

Euro: The intraday bias of the euro/dollar remains neutral at present. On the plus side, breaking through the 1.1292 resistance level will indicate that the correction from 1.1572 has been www.avaforexcn.completed after defending the 38.2% retracement level of 1.1039 from 1.0176 to 1.1572. The intraday deviation will rise again, and retest 1.1572. However, a continued breakthrough of 1.1039 will weaken this view and aim at the next 61.8% retracement level of 1.0709.

GBP: The intraday bias of GBP/USD first turned neutral and is currently down. The view remains unchanged, that is, the correction from 1.3442 may have been www.avaforexcn.completed in 1.3138. A decisive breakthrough of the 1.3433/42 key resistance zone will confirm a larger uptrend recovery. Nevertheless, a correction below 1.3138 will be restored. But the downside space should be curbed by the 38.2% retracement level of 1.2099 to 1.3442 to bring about a rebound.

Yen: The intraday bias of the US dollar/yen remains neutral at this point. As long as the resistance level of 144.02 is turned into support, a further rebound is expected. As mentioned earlier, the decline from 158.86 may have www.avaforexcn.completed 139.87. Above 148.64Next, the 61.8% retracement level of 151.60 from 158.86 to 139.87 will be aimed at 151.60. However, a firm breakout of 144.02 will retest the low of 139.87.

The above content is all about "[Ihua Foreign Exchange Market Review]: Before the release of key data in the United States, the US dollar was under pressure". It was carefully www.avaforexcn.compiled and edited by the Avatrade Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!

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