The US Dollar’s position is a precarious one. While the yield environment has become somewhat more supportive, the data picture has not. A great deal of Fed optimism will be required in order to drum up support for the US Dollar.
The Euro finished near four-month lows versus the Dollar, but the lack of volatility in recent markets makes it unlikely it breaks significantly lower. We’re watching key event risk for a potential breakdown.
The Sterling may continue to carve a series of higher-highs & higher-lows during the summer months amid the ongoing shift in outlook for the Bank of England.
High-profile event risk on the domestic and the external fronts in the week ahead threatens to undermine the recent Australian Dollar rally.
Building geopolitical tensions in Iraq and Ukraine have offered some much needed support to gold prices which had fallen more than 10% off the March high.
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