USD continues to rise
17 May 2023
Wednesday had quite a busy calendar with a lot of important data, especially for the GBP, CAD and the USD. The day started with the higher-than-expected Claimant Count Change from the UK, which came higher than expectations, weakening the Pound. The next fresh piece of news in the calendar was the inflation number from Canada growing by 0.7% last month, which was higher than the expected 0.5%. At the same time, we also learned the retail sales number from the US that disappointed, coming at 0.4%.
The last two numbers were especially important for the USDCAD who reacted with a whipsaw movement. First, we had a significant drop in order to see a bullish counter attack at the end of the session. Today, the pair is continuing its upswing, which is in line with the latest sentiment. In general, the USD is flexing its muscles today. The EURUSD is dropping and is currently on the lowest levels since the beginning of April. The USDJPY is approaching highs from March and May and a breakout above can be a key, long-term buy signal.
The stronger USD continues to hurt precious metals. Gold is on a wat to test the 23.6% Fibonacci that is on its April lows. The chances that we will get there are pretty high. Silver is in an even worse condition. A few more bearish cents and we will be on the lowest levels since the end of March here. Interestingly enough, oil remains pretty resilient to the strength of the USD but, let’s be clear, it did suffer a lot in the past few weeks anyway.
Last but not least, we have indices. In reality, most of them are moving sideways and there is no clear direction. The best situation is, in my opinion, on DAX, who is very close to establishing new, long-term highs. All it needs is just one small push.