Forex Today: Holidays in Asia and fear to start the week

Valeria Bednarik FXStreet

What you need to know on Monday, May 3:

The American dollar soared on Friday as risk-aversion fueled demand for the greenback alongside month-end flows. The EUR/USD pair settled at 1.2020 while GBP/USD finished the week around 1.3830. The Australian dollar also fell, but held above the 0.7700 threshold, while the USD/CAD settled near weekly lows in the 1.2280 price zone.

Stocks fell, with US indexes posting substantial losses, while US government bond yields remained subdued, ending Friday little changed on a daily basis. Despite the market has been looking beyond coronavirus-related headlines, there was a report on Friday that spurred concerns.

A preliminary study indicates that just one shot of a coronavirus vaccine is not enough to generate protection against the new, more aggressive variants. Given the world’s shortage of vaccines, many countries have chosen to speed up vaccinating with at least one dose, to cover a larger portion of its population, rather than providing two shots to a smaller number of people. With that in mind, the economic comeback may take longer than anticipated.

Gold settled around $ 1,770.00 a troy ounce, little changed for a second consecutive week. Oil retreated on Friday, after hitting fresh one-month highs mid-week. WTI finished the week with gains at $ 63.45 a barrel.

Japan celebrates the Golden Week and will remain on holidays until next Wednesday. China also celebrates different local holidays. Volumes at the weekly opening will be quite low and may result in unexpected wide movements among major pairs.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.