The USD strength continues to surge higher. This was even strengthens more after listening to Janet Yellen speech on Friday. She reiterated that rate hike might come earlier than anticipated if economic data shows more positive signs. There are a couple of economic data coming out over the week which will further show the direction of USD. If these data should come out strong, USD is likely to put more down ward pressure on its entire major pairs, especially the emerging market currencies. A stronger dollar will also see some further sell-offs on Gold.
The debt situation in Greece is also a very important fundamental issue affecting the market, especially the EUR pairs. Greece’s liquidity situation is worsening and hope of meeting debt repayment is looking weary. A deal is expected to be reached on by 5th of June. Any slack in the deal will see a sell -off on EUR across board.
Aussie is another interesting currency to watch over the week, the RBA governor‘s speech in the last meeting was a neutral one which actually opens room for more monetary policy. Economic data from china is having more impact on the Australian economy especially the mining sector. More downward pressure is on the Aussies and a strong dollar will likely see AUDUSD at 0.7600.
Sterling is fundamentally strong against other pair’s asides USD. I will personally suggest long GBP against other pairs like JPY or AUD. The strength of USD is pushing down GBPUSD.
The Japanese economy shows some signs of growth last week GDP figures beat expectation. The economy over the years has experienced massive monetary policy. It seems the policy is now beginning to pay off. However it seems investors are still having some doubts. The yen is still weak and might still see some sell offs.