After the weekend, the dollar is slightly weaker than the other major currencies with AUD on highs after good data from Australia. Despite solid macro data from the US on Friday, the dollar cannot develop a stronger rally, as the uncertainty surrounding political risks hampers the enthusiasm of investors. USD/JPY remains blocked at 109.75. EUR/USD is trying to break through 1.17 (for now, unsuccessfully), finding support in calming the situation on the Italian political scene, where the vision of repeated elections is distancing. The stock market in Asia is doing well, influenced by a positive climate from Friday caused after the good data from the US labor market was released. Japanese Nikkei225 gains 1.5% and Chinese Shanghai Composite grows by 0.6%. Crude oil remains under pressure of worries about rising global stocks of gas, and Friday data on the growth of active drilling rigs in the US (+2) fuel concerns. On Monday, WTI is relatively stable at $65.75 after it had a two-month low on Friday.
On Monday 4th of June, the event calendar is light in important data releases, but the market participants should keep an eye on Construction PMI data from the UK, Sentix Investor Confidence and PPI data from the Eurozone and Factory Orders form the US.
AUD/USD analysis for 04/06/2018:
For now, AUD wins Monday's trading with the help of a set of local data. Retail sales in April increased by 0.4% against expected 0.3$. Operating profits of companies in the first quarter increased by 5.9% versus the expected 3.1% and 2.8% quarter before, which raises expectations before the publication of GDP on Wednesday.
Let's now take a look at the AUD/USD technical picture at the H4 time frame. After the data release, the market has broken through the technical resistance at the level of 0.7603 and then broke out the nearby 50% Fibo at the level of 0.7611. The momentum remains strong, so the bullish outlook is now preferred as long as the buy side is in control of the market. The next target is seen at the level of 0.7642 or at 61% Fibo at the level of 0.7659. The zone between those two levels is the key zone for the bears, because if the bulls will break through it, the next target is seen at the level of 0.7743.
