Sterling retreats even after impressive UK house prices

The Australian dollar rose against the US dollar after the relatively impressive Chinese trade numbers and after S&P Global boosted the country’s credit rating. According to the Chinese ministry of finance said that exports rose by 27.9% year-on-year in May while imports rose by 51.1% in the same month. While the numbers missed estimates, they were relatively strong and signaled that the country bought more goods from Australia. Meanwhile, in a report, S&G Global Ratings said that the country’s budget deficit will narrow to 3% in the next few years. The agency upgraded Australia’s credit rating to stable from negative. Data by AIG showed that the Australian services PMI increased to 61.2 in May.

The British pound declined slightly against the US dollar even after the relatively impressive house price index (HPI) data. The numbers by Halifax showed that the average house price in the UK rose by 1.3% in May on a month-on-month basis. This growth led to a year-on-year increase of 9.5%, which was better than the previous 8.2%. In total, the average house price in the UK has jumped by more than 20,000 pounds since the pandemic started. This trend is mostly because of low interest rates and the government’s stamp duty waiver. Also, according to Halifax, increased savings during the recent lockdowns helped people boost their savings.

The Swiss franc gained against the US dollar after the relatively strong unemployment rate and consumer inflation data from the country. The data showed that the Swiss consumer price index (CPI) rose from 0.2% in April to 0.3% in May. The CPI rose by 0.6% on a year-on-year basis. These numbers are still below the Swiss National Bank (SNB) target of 2%. Meanwhile, the country’s unemployment rate declined from 3.2% to 3.0%. The data came a few weeks after the SNB governor said that the bank would likely continue to expand its balance sheet to cushion the economy.

USD/CHF

The USDCHF pair declined to an intraday low of 0.8985, which was slightly lower than last week’s high of 0.9053. On the four-hour chart, the pair moved slightly below the 25-day moving averages (MA) while the signal and histogram of the MACD made a bearish crossover pattern. It has also formed a head and shoulders pattern while the Relative Strength Index (RSI) has declined to 45. Therefore, the pair may keep falling as bears target the year-to-date low of 0.8930.

EUR/USD

The EURUSD pair rose to a high of 1.2167, which is slightly above the Friday low of 1.2100. On the four-hour chart, the pair is below the ascending pink trendline and slightly above the 23.6% Fibonacci retracement level.  The pair has also formed a head and shoulders pattern while the money flow index (MFI) has been on a downward trend. Therefore, the pair may experience some volatility ahead of the upcoming US inflation data and ECB interest rate decision.

AUD/USD

The AUDUSD pair rose to an intraday high of 0.7755, which was the highest level since Thursday. On the four-hour chart, the pair is substantially above 0.7643, which was the lowest level last week. It has also moved above the important support at 0.7690. The pair may keep rising as bulls target the next resistance at 0.7775.