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Tuesday May 12 FX market update - GBP/USD under pressure

Tuesday May 12 FX market update - GBP/USD under pressure

The US Dollar was bearish against most of its major pairs on Tuesday with the exception of the CAD and GBP. On the economic data front, the National Federation of Independent Business's Small Business Optimism Index fell to 90.9 on month in April (83.0 expected), from 96.4 in March, a level last seen in 2013. The Bureau of Labor Statistic's Consumer Price Index declined 0.8% on month in April (as expected), from -0.4% in March, marking a low last seen in 2008. The Monthly Budget Deficit jumped to 737.9 billion dollars on month in April (737.0 billion dollars expected), from 160.3 billion dollars in March, marking a record Monthly Budget Deficit. 

On Wednesday, the Mortgage Bankers Association's Mortgage Applications data for the week ending May 8th is expected. Finally, the Producer Price Index Final Demand for April is expected to decrease 0.5% on month, from -0.2% in March.                                       

The Euro was bullish against all of its all pairs. In Europe, The Banque de France's industrial business climate index came out at 48 in April, compared with 52 in March (revised from 51) and 40 anticipated by economists. The institution indicated that economic activity in France fell by 27% in April, a slight improvement on the decline observed in March.

The Australian dollar was bearish against most of its major pairs with the exception of the CAD, GBP and USD.

The GBP/USD dropped 60pips to 1.2275 in Tuesday's trading making it one of the largest movers. Looking at key levels to watch. Resistance can be seen at the 1.2315 level with first support at 1.2245. The preferred technical scenario is bearish towards 1.222 as long as 1.2315 resistance has not been touched. 

Source: GAIN Capital, TradingView

Happy trading.

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