The US economy expanded by 2.6% in the first quarter of 2014 which is better than its previously recorded figure of 2.4% in the last quarter of 2013; however, the economy couldn’t meet the expected outcome of 2.7% but still the investors preferred to cling with the US dollar.
In addition, the unemployment claims in the US economy dropped down to 311,000 for the past week which is a good sign for the job market, hence leading to push the major currencies down against the greenback.
The Euro was trading at the 1.3770 resistance area in the US session yesterday, after which it lost nearly 40 points against the USD as the economic indicators came out. Currently the pair is trading at 1.3741 in the Asian session on Friday, where a move below its support level of 1.3737 could take it down to 1.3720 and 1.3703. Sellers can feel free to stay short or sell from tops as long as the pair does not move above and sustain above the major resistance level of 1.3845 which is 100 points away from its current price.
The retail sector of the UK economy expanded in the past month where the retail sales of 1.7% recorded were way better than its previously recorded figure of negative 2%; which caused the pair to gain by 50 points yesterday but the bullish move was offset later on by the US fundamentals.
Currently, the pair is trading just above its pivot point level of 1.6607 where it would remain safe to be bought if it moves above the 1.6568 support level. On the other hand, if it moves above yesterday’s high of 1.6640 then it would target 1.6660 and 1.6679 mild resistance levels.
Aussie is extremely bullish right now where a slight bearish retracement on the Fibonacci scale is due where the pair is expected to drop down to 0.9240 0.9210 or 0.9195, so the traders are recommended to stay long if they are medium to long term traders. The bearish zone is quite far away as bears would only get stronger in volume if the pair moves below 0.9120 area.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org