If we look at the macroeconomic data, the weakening of the dollar is somewhat surprising, as durable goods orders in the United States increased by 3.2%. Notably, economists had expected just a 0.6% rise. However, it is better to pay attention to the moment when the dollar weakened. The fact is that it happened at the very opening of the European trading session. While data on orders was published at the beginning of the US trade. Thus, the issue is really interesting. The situation could be explained by the publication of an interview with Philip Lane, who is not only the chief economist of the ECB but also a member of the board. In the interview, he said that on May 4th, the key interest rate hike was inevitable. The interview was published on Tuesday almost at the end of the American trading session. In other words, yesterday's growth in the single currency and the pound sterling was just a reaction of investors to Philip Lane's statements. The importance of his words is so great that they simply overshadowed even the positive data on durable goods orders in the United States.
US Durable Goods Orders
Today, the greenback may continue weakening due to the publication of the initial estimate of the US GDP in the first quarter. After all, the pace of economic growth may slow down noticeably. Although the economy is still expanding, the expected slackening points to the inevitability of an economic recession. This, in turn, will negatively affect the US dollar.
The euro updated the high of the medium-term trend against the US dollar during an inertial movement. It is worth noting that this is the third attempt to prolong the trend, which indicates a high desire of buyers to continue the growth. However, a real signal will appear only after the price consolidates above the 1.1000 level. Until then, there is a risk of a drop.
Meanwhile, the GBP/USD pair did not show any considerable changes. The quote continues to move within the sideways channel of 1.2350/1.2550. For this reason, the trading strategies remain the same. Traders may wait for either a breakout or a rebound.
