The US dollar holds steady in early Friday trading, after pulling back from fresh lows against a basket of major currencies on Thursday. The move was driven by profit-taking and boosted by upbeat jobless claims data.
However, current dollar’s rally is seen as correction, as pressure on the dollar persists on lowered expectations for US rate hike in the near future. Dismal US jobs report for May and dovish tone from Fed Chair Yellen in her recent speech, maintain negative sentiment.
Euro fell below 1.1300 mark against dollar, following repeated rejections at strong 1.1400 resistance zone, while Sterling slid into daily cloud, heading towards 1.4400 handle against the dollar. The pound extends weakness of past three days that emerged from 1.4655 spike high, where Tuesday’s sharp move higher was rejected.
Sterling remains vulnerable and highly volatile, as Brexit referendum day nears.
US dollar remains at the back foot against Japanese yen and consolidates above yesterday’s fresh 5-week low at 106.24, awaiting key events, due next week – FOMC two-day policy meeting that concludes on Wednesday and BOJ meeting, scheduled on Thursday.
Stronger dollar pushed oil prices lower, with US oil extending weakness on Friday, after double upside rejection at $51.65, 2016 high. Oil price fell further 80 cents on Friday and probed below psychological $50 support, extending Thursday’s pullback from $51.65 to $50.22.
However, oil maintains overall firm bullish tone, based on strong oil demand and recent production disruptions.
Gold stays tall on Friday and consolidates under fresh three-week high at $1271, posted on Thursday. Yellow metal is on track for the second consecutive strong bullish weekly close, which signals further gains in the near-term action.
Gold gained nearly 20% so far in 2016.
Today’s highlights

French Industrial Production showed upbeat results in April, coming out at 1.2% agains 0.5% consensus and downward-revised March’s -0.4% release.

Italian IP is due at 08:00 GMT and forecasted to rise by 0.3% in April, following no change in March.
Canada’s jobs data are the highlight of the day, due at 12:30 GMT, with unemployment rate expected to stay unchanged at 7.1% and the number of employed people expected to rise by 3.1K in May, following 2.1K fall in April.

June University of Michigan consumer sentiment is due at 14:00GMT and is forecasted at 94.1, below May’s figure at 94.7.

Important levels

EURUSD consolidates above 1.1300 handle that was cracked on strong pullback from 1.1400 resistance zone. Near-term technicals weakened and see risk of break below strong 1.1300/1.1280 support zone, which would trigger further easing towards 1.1240/1.1200 supports.
At the upside, initial resistance lies at 1.1335, followed by 1.1350 and 1.1365. Bounce above the latter would signal fresh attempts towards strong 1.1400/16 barriers.
GBPUSD is under strong pressure after ending the second day in red. Friday’s fresh bearish extension dipped ticks away from 1.4400 support, with risk seen for extension towards 1.4385 and key 1.4350/30 support levels.
Resistances lay at 1.4485, then 1.4524/36, break of which would shift near-term focus higher.

WTI CRUDE OIL cracked psychological $50 support, on extension of yesterday’s pullback from yearly high at $51.65. Weak near-term studies see risk of further easing below strong $50 support, towards $49.25/00 zone. However, overall picture maintains strong bullish tone, showing scope for renewed bullish action after near-term correction phase ends.
Initial resistance lies at $50.71, followed by $51.00 and strong $51.65 barrier., Market Analysis