Daily Forex Market Preview, 02/05/2018
The U.S. dollar was seen maintaining the bullish momentum on the day. European markets were closed on account of the 1st May bank holiday. Economic data showed that the UK’s manufacturing PMI was weaker than expected at 53.9.
In the U.S. the ISM manufacturing PMI was seen falling to 57.3 missing forecasts of 58.4 and slower than the March PMI reading of 59.3.
On the political front, the U.S. administration was seen exempting South Korea, Mexico, Canada and the EU from the steel and aluminum tariffs that were due to come into effect from the 1st of May. However, the exemption is not long term as the U.S. only delayed the tariffs by 30 days for the above nations.
Looking ahead, the economic calendar today will mark the release of the UK’s construction PMI data which will conclude the monthly PMI’s for April. Economists forecast that the UK’s construction activity slightly improved to 50.5 after falling into contraction the month before.
The Eurozone will be releasing the manufacturing and services PMI data for the month of April. No major changes are expected but activity is expected to remain subdued. The flash GDP estimates for the first quarter will also be released this week. The Eurozone GDP is forecast to rise 0.4% on the quarter, marking a slower pace of increased from 0.6% in the previous quarter.
The FOMC statement will take center-stage today. No changes are expected to the short-term interest rates. There will be no press conference or any economic projections.
XAUUSD 02-05-2018 Intra-day analysis
XAUUSD (1310.43): Gold prices posted a strong decline on the day as price action slipped below the 1311 – 1307 level of support. Gold prices briefly dropped to the 1301.80 level before recovering. With price action back in the support zone, only a clean breakout above 1311 will signal further gains. To the downside, we expect price action to be limited at the current levels. The previously breached support level at 1325 remains the upside target which could be tested for resistance.