The week is looking like another important one and it is once again the US economy that will be the litmus test. After what looks like a slow start to the week, we are in for some fireworks as the new month of May begins.

FOMC

Most of the attention will be on the FOMC Interest Rate decision. While there is no expectation of a rate rise at this meeting, we are still looking at hikes in June, September and December. If the economists are to be believed. Keep a close eye on the post-meeting statement.

USD Employment

The first Friday of every month is usually one to mark in the diary. That’s because we have the regular US employment data. This month there is not only interest in the headlines number but also on the rate of wage growth. We’ve seen other countries recently post poor wage growth and the currencies got hit accordingly.

USD Stumbles

Our key support and resistance levels held up well on Friday, despite some data that should have been more positive for the dollar. We saw a nice strong print in US GDP, but the DXY just couldn’t make up any ground. It ultimately weakened in late trade.

Perhaps it was getting nervous ahead of the raft of data we have out this week. Sometimes the big economic releases force the market to go quiet for some period of time. That might well be what we have in store early in the week.

Our major focus last week was the 91.80 level which held up perfectly. If we are to breakout we will have to wait on the right type of price action above that level. My next target is at 92.60.