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With the global markets in the midst of a generalised consolidation phase, the US dollar saw some decent gains as the FX universe gradually turned its focus to the announcement of the US CPI next week.
In the face of further declines in US rates, the USD Index, or DXY, made a slight advance and managed to test the 105.40 zone again. The MBA’s weekly mortgage applications are due on May 8; Wholesale Inventories will second them, and Fed Representatives Jefferson, Collins, and Cook will give presentations.
The EUR/USD pair lost some of its recent upward trend and returned to the 1.0750 zone due to a revival of selling pressure. Prior to the release of the ECB Accounts on May 10, Industrial Production in Germany is scheduled for May 8 on the national calendar.
The GBP/USD pair reversed a multi-day rally and dropped much lower. To enable a possible test of the recent high close to 1.2630, Cable must first pass the important 200-day SMA at 1.2545. The BoE meeting on May 9 is the next event scheduled for the UK calendar.
Further JPY selling sponsored the second consecutive daily advance in USD/JP, this time reclaiming the area beyond the 154.00 yardstick. On May 8, weekly Foreign Bond Investment prints are expected.
AUD/USD appears to have met quite a decent resistance around the 0.6650 region so far. Following the RBA meeting earlier on Tuesday, the next significant release will be the Wage Price Index on May 15.
Commodities:
WTI prices remained slightly on the defensive in the lower end of the recent range as traders gauged geopolitical concerns and prospects of weak demand.
Prices of Gold retreated marginally on the back of the small advance in the Greenback and hopes of a ceasefire in the Middle East. Silver prices, in the meantime, attempted some consolidation in the area of recent peaks around $27.50.
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