US Dollar is retracing lower on Monday following the sharp growth on Friday. However, we do not expect the bearish correction to be long-lived: strong NFP and average hourly earnings made the markets believe that the Fed could raise the interest rate in September. The market is now looking forward to the retail sales release on Thursday. Forecast is upbeat ( 1.1%), so the greenback could get another boost.
EUR/USD recovered towards the 1.1200 mark from the Friday’s low of 1.1050. German bond yields returned to growth following the strong manufacturing figures. However, we expect the decline to resume soon: break below 1.1050 could open the way to 1.0820.
GBP/USD found some support at 1.5200, but we expect the pair to extend the decline this week. Watch the UK trade balance on Tuesday. Break below the 1.5200 support will open the way to 1.5080. We’ll remain bearish below 1.5450.
USD/JPY retraced from the Friday’s peak of 125.85, but holds above the 125.00 support. The pair remains overbought, so we could see a dip to 124.60 in the coming sessions. This area could be a good point to rebuy the US dollar.
AUD/USD has once again found support at 0.7600. Next resistance lies at 0.7740 и 0.7810. Watch the Australia’s business confidence index and home loans tomorrow. Data could surprise the market to the downside. What’s more, China is scheduled to release May CPI and PPI (forecasts – negative).
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