The US Dollar is expected to strengthen against most currencies in the short term, especially if US data comes in strong. The Euro and British Pound could see some weakness due to potential rate cuts by the ECB and Bank of England respectively. The Australian and New Zealand Dollars could see some short-term strength due to recent economic data, but the outlook is uncertain in the long term.

Euro (EUR/USD):

  • Forecast: Neutral to bearish
  • Key factors: German inflation data (mixed), ECB meeting (rate cut expected). Weaker US data might favor a Euro rebound.
  • Support levels: 1.0803, 1.0772
  • Resistance levels: 1.0888, 1.0918
  • Technical analysis: EUR/USD is testing support at 1.0845. A potential decline towards 1.0803 is possible.


British Pound (GBP/USD):

  • Forecast: Neutral to bearish
  • Key factors: Lack of UK data, US data (could impact GBP).  Weak US data could offer some support to the Pound.
  • Support levels: 1.2677, 1.2646
  • Resistance levels: 1.2797, 1.2853
  • Technical analysis: GBP/USD faces resistance at 1.2761. A break below could lead to a decline towards 1.2677.


Japanese Yen (USD/JPY):

  • Forecast: Neutral to bullish
  • Key factors: US data (limited impact expected)
  • Support levels: 156.65, 156.45
  • Resistance levels: 157.90, 158.04
  • Technical analysis: USD/JPY is testing support at 157.08. A potential rise towards 157.90 is possible.


Australian Dollar (AUD/USD):

  • Forecast: Neutral
  • Key factors: Higher than expected inflation in Australia, RBA policy outlook
  • Analysis: Australian inflation rose above expectations, potentially delaying RBA rate cuts. The impact on AUD/USD remains unclear.
  • Technical Analysis: The AUD is testing support at 0.6643. A break below could lead to 0.6578. Resistance lies at 0.6695 and 0.6760.


New Zealand Dollar (NZD):

  • Fundamental Analysis: The RBNZ revised its inflation and rate cut forecasts. The first rate cut is now expected in August 2025, which is bullish for the NZD. However, a widening budget deficit could lead to an earlier rate cut.


Important factors to consider:

  • German CPI data (released on Friday): A higher than expected reading could further weaken the EUR.
  • US Fed-Richmond manufacturing index and Beige Book (released later today): Strong data could strengthen the USD and put pressure on other currencies.
  • ECB meeting (June 6th): A rate cut by the ECB could weaken the EUR.

Categories: Market News

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