🔍 Technical Outlook
Support Levels:
• 143.50
• 144.90
Resistance Levels:
• 147.65
• 148.44
Indicators:
• RSI: Recovering from oversold territory, suggesting potential for upward movement.
• MACD: Negative, indicating bearish momentum.
• 50-day EMA: Acting as resistance near 145.90.
The pair is attempting a bullish correction after finding support at 144.90. A break above the 50-day EMA could open the path to higher resistance levels.
📰 Fundamental Developments
• US Dollar Weakness: The dollar continues to decline due to concerns over the Federal Reserve's economic outlook and Moody's downgrade of the U.S. sovereign credit rating.
• US-Japan Talks: Potential discussions between the U.S. and Japan on exchange rate stability are influencing market sentiment, with expectations that these talks could aim to reduce currency volatility.
• Japanese Economic Data: Japan's Tertiary Industry Activity Index for March showed a decline, suggesting potential recessionary pressures in the services sector, which could impact the yen's strength.
📌 Weekly Outlook & Strategy
• Bullish Scenario: A sustained move above 145.90 (50-day EMA) could target 147.65 and 148.44. Positive U.S. economic data or hawkish Fed commentary may support this move.
• Bearish Scenario: Failure to break above 145.90 may lead to a retest of support at 144.90 and 143.50. Continued U.S. dollar weakness or strong Japanese economic indicators could drive this decline.
• Neutral Scenario: Consolidation between 144.90 and 145.90 as markets await clearer economic signals.
📅 Key Economic Events
• 21 May (Wednesday): U.S. Manufacturing PMI (Forecast: 49.9)
• 22 May (Thursday): Japan Services PMI (Prior: 50.1)
• 23 May (Friday): U.S. New Home Sales (Forecast: +8.9%)