Daily Forex Analysis - 18th May 2021

USD Overview (18 May 2021)

Yesterday, USD weakened against most major currencies except AUD, NZD and CHF.

During their speeches earlier today, FOMC committee member Richard Clarida said that the recent jobs report indicated that now is not yet the time to consider cutting back on the central banks quantitative easing but will give advance warning when they are considering on doing so. However, committee member Robert Kaplan highlighted that he is more inclined to sooner discussions on cutting back quantitative easing than later.

The U.S. housing data will be released later at 2030 (SGT).

- Building Permits (Forecast: 1.77M, Previous: 1.76M revised from 1.77M)

- Housing Starts (Forecast: 1.71M, Previous: 1.74M)

FOMC committee member Bostic will be speaking tomorrow at 1230 (SGT). During this time, there may be volatility in USD.

NZD/USD Outlook (18 May 2021)

Overall, NZD/USD is ranging across.

NZD/USDs next support zone is at 0.71000 and the next resistance zone is at 0.72850.

Look for short-term buying opportunities of NZD/USD.

AUD/USD Outlook (18 May 2021)

Overall, AUD/USD is ranging across. Recently, AUD/USD trended into the resistance zone of 0.78000.

In the released monetary policy meeting minutes earlier today, the Reserve Bank of Australia highlighted that it will extend bond buying if the situation calls for it. The central bank also reiterated that the conditions for an interest rate hike are unlikely going to be achieved until at least 2024 at the earliest.

The Australian Westpac Consumer Sentiment data (Forecast: NA, Previous: 6.2%) will be released tomorrow at 0830 (SGT).

AUD/USDs next support zone is at 0.77500 and the next resistance zone is at 0.78000.

Look for short-term selling opportunities of AUD/USD.

USD/JPY Outlook (18 May 2021)

Overall, USD/JPY is trending upwards.

The Japanese Preliminary GDP q/q data (Actual: -1.3%, Forecast: -1.1%, Previous: 2.8% revised from 3.0%) released earlier today indicated negative economic growth during the first quarter of 2021.

USD/JPYs next support zone is at 108.500 and the next resistance zone is at 110.800.

Look for buying opportunities of USD/JPY.

EUR/USD Outlook (18 May 2021)

Overall, EUR/USD is trending upwards.

The eurozone flash quarterly employment change and GDP data will be released later at 1700 (SGT).

- Flash Employment Change q/q (Forecast: 0.1%, Previous: 0.3%)

- Flash GDP q/q (Forecast: -0.6%, Previous: -0.6%)

Currently, EUR/USD is testing the resistance zone of 1.21500 and the next support zone is at 1.19700.

Look for buying opportunities of EUR/USD if it breaks above the resistance zone of 1.21500.

GBP/USD Outlook (18 May 2021)

Overall, GBP/USD is trending upwards. Recently, GBP/USD broke above the key level of 1.41.

During his speech yesterday, Bank of England committee member Vlieghe highlighted that inflation in the UK is expected to rise above the central banks target due to transient bottlenecks and base effects. He also highlighted the uncertainty of whether furloughed employees will return to the workforce fully.

The UK employment data will be released later at 1400 (SGT).

- Average Earnings Index 3m/y (Forecast: 4.5%, Previous: 4.5%)

- Claimant Count Change (Forecast: 25.6K, Previous: 10.1K)

- Unemployment Rate (Forecast: 4.9%, Previous: 4.9%)

Currently, GBP/USD is testing to break above the key level of 1.41. Its next support zone is at 1.40000 and the next resistance zone is at 1.43500.

Look for buying opportunities of GBP/USD if it breaks above the key level of 1.41.

USD/CAD Outlook (18 May 2021)

Overall, USD/CAD is trending downwards. Recently, USD/CAD broke the support zone of 1.21000.

The Canadian Housing Starts data (Actual: 269K, Forecast: 305K, Previous: 335K) released yesterday indicated a slowdown in the number of residential buildings that began construction in April.

USD/CADs next support zone is at 1.19000 and the next resistance zone is at 1.21000.

Look for selling opportunities of USD/CAD.

GBP/JPY Outlook (18 May 2021)

Overall, GBP/JPY is trending upwards. Recently, GBP/JPY bounced up from the key level of 154.

During his speech yesterday, Bank of England committee member Vlieghe highlighted that inflation in the UK is expected to rise above the central banks target due to transient bottlenecks and base effects. He also highlighted the uncertainty of whether furloughed employees will return to the workforce fully.

The UK employment data will be released later at 1400 (SGT).

- Average Earnings Index 3m/y (Forecast: 4.5%, Previous: 4.5%)

- Claimant Count Change (Forecast: 25.6K, Previous: 10.1K)

- Unemployment Rate (Forecast: 4.9%, Previous: 4.9%)

GBP/JPYs next support zone is at 153.000 and the next resistance zone is at 155.000.

Look for short-term buying opportunities of GBP/JPY.

EUR/JPY Outlook (18 May 2021)

Overall, EUR/JPY is trending upwards.

The eurozone flash quarterly employment change and GDP data will be released later at 1700 (SGT).

- Flash Employment Change q/q (Forecast: 0.1%, Previous: 0.3%)

- Flash GDP q/q (Forecast: -0.6%, Previous: -0.6%)

Currently, EUR/JPY is testing the resistance zone of 132.800 and the next support zone is at 130.800.

Look for buying opportunities of EUR/JPY if it breaks the resistance zone of 132.800.