US data fails to inspire the dollar

<p>The USD continues to trade on the back foot as FX markets look for fresh correlations to other asset markets. Volatility remains at elevated levels […]</p>

The USD continues to trade on the back foot as FX markets look for fresh correlations to other asset markets. Volatility remains at elevated levels as investors witness a rally in oil which is closely correlated with a bid tone in the euro, as FX markets adjust to a lower fixed income and equities outcome as a negative for the dollar. The US data highlighted a stronger fundamental picture as both releases should have inspired the dollar. The trade data showed solid US imports which supports the weaker Q1 growth theory as a temporary measure and the ISM data surprised to the upside – yet EUR/USD rallied from a session low of 1.1070 yesterday to 1.1270 (at the time of writing).

The NZD fell over 1% in the Asian session as employment data added to the disappointment of the latest milk price auction. The unemployment rate rose to 5.8% in Q1 versus the consensus forecast of 5.5%, which adds to the pressure on the RBNZ to stimulate the domestic economy with a cut in interest rates.

The UK services PMI data will be the last release before voters head for the polling stations, with the bookmakers calling a hung parliament outcome as a 93% certainty. The US session gives insight to the US jobs report with the ADP survey as Fed chair Janet Yellen is scheduled to speak in Washington.

 

 

EUR/USD
Support
 1.1175-1.1055-1.0920 | Resistance 1.1295-1.-1.1450-1.1535

 

 

USD/JPY
Support 
119.35-118.30-117.50 | Resistance 120.50-120.85-121.55

 

 

GBP/USD
Support 1.5070-1.4920-1.4855 | Resistance 1.5305-1.5450-1.5530

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