Sterling and Dollar Lead as Trade Deal Grabs Attention
| Action Insight Weekly Report 5-10-24 |
Sterling and Dollar Lead as Trade Deal Grabs Attention |
Last week was dominated by developments out of the US and UK, not just because of monetary policy decisions, but also the unexpected announcement of a US-UK trade deal. Fed's hold and BoE's cut were were largely overshadowed by the surprise trade breakthrough. Importantly, the structure of the agreement offered valuable insights into the US administration’s trade strategy which could set the template for negotiations with other key partners. Despite the significance of the agreement, market reactions were relatively restrained. Major US stock indexes and the UK’s FTSE 100 closed slightly lower. Investors remain cautious about the deal’s practical impact and the broader global developments. Still, the news did provide meaningful support to the currencies involved: Sterling and Dollar emerged as the week’s top performers. Japanese Yen took third place In contrast, Loonie underperformed at the bottom. Kiwi and Swiss Franc also lagged. Euro and Aussie ended in the middle of the pack. |
AUD/USD Weekly Report AUD/USD retreated after edging higher to 0.6511 last week, but downside is contained above 0.6364 support so far. Initial bias stays neutral this week first. On the upside, break of 0.6511 will resume the rally from 0.5913 to 61.8% retracement of 0.6941 to 0.5913 at 0.6548. However, considering bearish divergence condition in 4H MACD, break of 0.6364 support should confirm short term topping. Intraday bias will be turned back to the downside for 38.2% retracement of 0.5913 to 0.6511 at 0.6283. | |
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