News

After attempting to break higher this week, USDCAD buyers continue to come up short at key resistance levels. On Thursday, the pair tried and failed to move above both the 200-hour moving average and the 50% retracement of the May trading range, stalling momentum.

Today, after rallying in the Asian Pacific session, the price In early European trading had another brief move above the 200-hour MA, but that too failed, reinforcing the ceiling. The price has since rotated back to the downside and is now trading below the 100-hour moving average at 1.37968, a level that is now acting as resistance. Staying below this level keeps the sellers in control in the short term.

The next key support comes into play at the swing area between 1.37498 and 1.37724, which held several lows earlier in May. A break below this zone could increase bearish pressure.

Key technical levels:

Resistance:

• 100-hour MA: 1.37968
• 38.2% of the May range at 1.38107
• 200-hour MA 1.3818

Support:
• Swing zone: 1.37498 to 1.37724
• Low for May: 1.36841

As long as USDCAD remains below the moving averages, the short-term technical bias favors sellers.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior +2.2%
• CPI (HICP) M/M +0.2% vs +0.1% expected
• Prior +0.5%
• Core CPI Y/Y +2.9% vs +2.9% prior

Slightly higher than expected figures but nothing that will worry the ECB for the time being.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Preliminary 50.8. Last month 52.2
• Univ of Michigan sentiment final 52.2 vs 51.0 estimate
• Current conditions 58.6 vs 57.6 preliminary and 59.6 prior month
• Expectations 47.9 vs 46.5 preliminary and 47.3 prior month. 2nd worse for the year.

Inflation expectations:

• 1 year inflation expectations 6.6% vs 7.3% preliminary. Prior month 6.5%. Down from the preliminary.
• 5-year inflation expectations 4.2% vs 4.6% preliminary. Prior month 4.4%. A move lower for the month.

Joanne Hsu from the Univ. of Michigan says:

Consumer sentiment was unchanged from April, ending four consecutive months of plunging declines. Sentiment had ebbed at the preliminary reading for May but turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods. Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement. However, these positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May. Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future.

Year-ahead inflation expectations were little changed at 6.6%, inching up from 6.5% last month. This is the smallest increase since the election and marks the end of a four-month streak of extremely large jumps in short-run expectations. Notably, long-run inflation expectations fell back from 4.4% in April to 4.2% in May. This is the first decline seen since December 2024 and ends an unprecedented four-month sequence of increases. Given that consumers generally expect tariffs to pass through to consumer prices, it is no surprise that trade policy has influenced consumers’ views of the economy. In contrast, despite the many headlines about the tax and spending bill that is moving through Congress, the bill does not appear to be salient to consumers at this time.

China helped in the final readings

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are trading lower to start the last trading day of the week end of the month. A snapshot of the levels currently shows:

• Dow Jones (DJI): 42,104.40, -111.33 (-0.26%)

• S&P 500 (SPX): 5,887.38, -24.79 (-0.42%)

• Nasdaq Composite (IXIC): 19,064.80, -111.07 (-0.58%)

For the trading week, the indices are up between 1% and 2%:

• Dow Jones, +1.22%
• S&P +1.48%
• NASDAQ index +1.73%.

For the month of May:

• Dow Jones, +3.56%
• S&P +5.74%. The gain equals the gain from November 2024. Move above that level and it would be the best month since November 2023.
• NASDAQ index +9.24%. That was the best month since November 2023 when the index rose 10.7%

This article was written by Greg Michalowski at www.forexlive.com.

The USD moved lower after the data that showed inflation was under control – for now. The trade data saw a big improvement. The personal income data was solid.

Not so hot is Pres. Trump tweeted that China violated the trade agreement:

Stocks are lower. Yields are near unchanged.

The USD moved lower initially, but is moving modestly higher after the initial move.

EURUSD: The EURSUD moved above the 100-hour MA at 1.13342. The high reached 1.1357. The 1.1362 and 1.13803 are tatgets. THe high today reached 1.1389.

USDJPY: The USDJPY moved away from the 100 and 200-hour MA between 144.98 and 143.85. That area will now be resistance on a rebound.

GBPUSD: The GBPUSD moved higher and away from the 200-hour MA at 1.3475, but stalled at the higher 100-hour MA at 1.3501. Earlier today, the high stalled at the 100 hour MA increases the levels importance going forward.

USDCHF: The USDCHF has solid resistance against the 100/200 hour MA and the 50% of the range since April. That area comes between 0.8252 to 0.8257. ON the downside, a swing araa floor comes between 0.8193 to 0.8212. Getting below is more bearish.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior +2.2%
• CPI (HICP) M/M +0.2% vs +0.1% expected
• Prior +0.5%
• Core CPI Y/Y +2.9% vs +2.9% prior

Slightly higher than expected figures but nothing that will worry the ECB for the time being.

This article was written by Giuseppe Dellamotta at www.forexlive.com.