In the final trading sessions of May, leading currencies have been in a downward trend against the dollar. For instance, the pound/dollar pair lost over 100 pips in a single day, euro sellers in the EUR/USD pair are testing 1.0800, and the USD/CAD pair might update its May high around 1.3760.
USD/CAD
The rise in commodity prices and worsening geopolitical situation in the Middle East are contributing to the sharp increase of the USD/CAD pair. According to the technical analysis of USD/CAD, a bullish “piercing line” pattern was formed on the daily timeframe on 28 May. The confirmation of this pattern could lead to continued growth of the pair towards the May high of this year at 1.3760. If the price consolidates above this level, a test of the important range 1.3840-1.3790 is possible. A break below 1.3610 would invalidate the bullish scenario.
The following news could impact the pricing of USD/CAD:
- Today at 15:30 (GMT +3:00) US GDP for the first quarter
- Today at 18:00 (GMT +3:00) Crude Oil Inventories from the Energy Information Administration (EIA)
- Tomorrow at 15:30 (GMT +3:00) US Core PCE Price Index for April
GBP/USD
At the start of the week, the GBP/USD pair managed to test the important resistance level of 1.2800. A sharp rebound from this level led to the formation of a bearish “shooting star” pattern on the daily timeframe. Technical analysis of GBP/USD indicates a possible downward movement if the price confidently consolidates below 1.2670. If this pattern is invalidated, the pair might resume its rise towards the March high of this year at 1.2890.
Key events for price movement:
- Today at 21:50 (GMT +3:00) speech by Bank of England Governor Bailey
- Tomorrow at 11:30 (GMT +3:00) publication of the Bank of England Consumer Credit data for April
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