This article was written by Greg Michalowski at www.forexlive.com.
Source: Finnhub
AUD/USD has jumped 0.8% to 0.6785, reaching a two-month high and challenging the 200-day moving average resistance at 0.6800. The rally is driven by broad-based US dollar weakness after Moody's unexpectedly downgraded the United States' credit rating, citing fiscal deterioration and governance challenges. The Australian dollar is also benefiting from improved risk sentiment and expectations of a Reserve Bank of Australia rate cut in the coming months as inflation pressures ease. Immediate resistance is at the 200-day MA (0.6800), followed by the psychological 0.6850 level. Support has shifted higher to 0.6750 (previous resistance) and 0.6700. A decisive break above the 200-day MA could pave the way for further AUD/USD gains, while failure to sustain the momentum might lead to a pullback.
AUDUSD
Sentiment:
Very Positive
Source: Finnhub
The EUR/USD outlook indicates building enthusiasm over trade talks between the US and the Eurozone, boosting Euro.
EURUSD
Source: Marketaux
Market Analysis by covering: New Zealand Dollar US Dollar, US Dollar Index Futures, United States 10-Year, United States 30-Year. Read 's Market Analysis on Investing.com
NZDUSD
Source: Marketaux
The USD/JPY forecast shows further dollar weakness after a downgrade to the US government’s credit rating.
USDJPY
Source: Marketaux
US stock futures have declined while bond yields and gold prices surged in response to Moody's surprise downgrade of the United States' long-term sovereign credit rating from Aaa to Aa1. The ratings agency cited eroding fiscal strength, increased debt burden, and weakening governance as key drivers behind the downgrade. S&P 500 futures are down 0.6%, and the 10-year US Treasury yield has climbed 8 basis points to 3.75%. Spot gold, often seen as a safe-haven asset, has risen 1.2% to $1,950 per ounce. The US dollar index has plunged 0.9% to 102.50, its lowest level in two months. Traders are now reassessing the Federal Reserve's rate hike path, with the downgrade potentially limiting the central bank's ability to raise rates aggressively. The US dollar could face further pressure against major currencies, while gold might extend gains as investors seek refuge from economic uncertainties.
XAUUSD
Sentiment:
Negative
Source: Marketaux
AUD/USD has gained 0.5% to trade at 0.6765, buoyed by easing inflationary pressures in Australia and expectations of a rate cut by the Reserve Bank of Australia (RBA). The Australian Bureau of Statistics reported that the Consumer Price Index (CPI) rose 5.8% year-on-year in Q1 2025, down from 6.3% in the previous quarter and below the RBA's target range of 2-3%. Core inflation also moderated to 5.2% from 5.5%. The RBA is now widely anticipated to lower its cash rate by 25 basis points to 3.25% at its upcoming meeting to support economic growth. Technically, AUD/USD faces immediate resistance at 0.6800 (200-day moving average), followed by 0.6850. Support is located at 0.6720 (previous resistance turned support) and 0.6680. A sustained break above 0.6800 could signal further upside potential, while a dovish RBA could limit gains.
AUDUSD
Sentiment:
Very Positive
Source: Marketaux
Asian and European stock markets have retreated while the US dollar has weakened following Moody's downgrade of the United States' long-term sovereign credit rating from Aaa to Aa1. The ratings agency cited fiscal deterioration, rising debt burden, and governance challenges as reasons for the downgrade. Japan's Nikkei 225 index fell 0.8%, China's Shanghai Composite dropped 0.6%, and Hong Kong's Hang Seng declined 1.1%. In Europe, the STOXX 600 index opened 0.5% lower, with banking and financial stocks leading the losses. The US dollar index has slipped 0.7% to 102.70, its lowest level in two months, as investors reassess the Federal Reserve's rate hike trajectory. EUR/USD has climbed 0.6% to 1.0920, while USD/JPY has plunged 1.1% to 138.50. Traders now await further commentary from the Fed and the US Treasury regarding the potential impact of the downgrade on monetary and fiscal policies.
EURUSD
USDJPY
Sentiment:
Negative
Source: Marketaux
Gold (XAU/USD) has strengthened by 0.6% to $1,935 per ounce as Moody's surprise downgrade of the US credit rating from Aaa to Aa1 triggered fresh worries about the US economy and debt levels. The rating agency cited deteriorating fiscal strength and rising government debt burden for the downgrade. This development weighed on the US Dollar Index (DXY), which fell 0.4% to 102.8, supporting gold prices. However, the 10-year US Treasury yield rose 3 basis points to 3.52%, capping gold's upside. Near-term resistance for XAU/USD lies at $1,945 (weekly high), while support is seen at $1,920 (5-day moving average). A sustained break above $1,950 could open the door for a test of the $2,000 psychological level, especially if US economic concerns persist.
XAUUSD
DXY
Sentiment:
Positive
Source: Marketaux
EUR/USD has gained 0.2% to reach 1.0810 during Friday's session, driven by broad-based US Dollar weakness. However, the pair appears unlikely to break through the key resistance level at 1.0820 (38.2% Fibonacci retracement of the 2022-2023 downtrend) in the near term. The bearish momentum in the greenback seems to have peaked, with the US Dollar Index (DXY) finding support at 102.50. The euro's upside remains capped by sluggish Eurozone economic data and cautious European Central Bank rhetoric. Traders should watch for a potential reversal if EUR/USD fails to close above 1.0820 on a daily basis. Immediate support is located at 1.0780 (5-day moving average), followed by 1.0750 (50% Fibonacci retracement).
EURUSD
DXY
Sentiment:
Neutral
Source: Finnhub
GBP/USD has surged 0.8% to 1.2680, approaching its highest level since April 2022, supported by strong technical momentum and disappointing US consumer sentiment data. The University of Michigan Consumer Sentiment Index fell to 57.7 in May, missing expectations of 63.0 and marking the lowest reading in six months. This soft US data weighed on the US Dollar Index (DXY), which dropped 0.6% to 102.2. Technically, GBP/USD has broken above the key resistance at 1.2670 (61.8% Fibonacci retracement of the 2021-2022 decline), paving the way for a potential test of the 1.2750 level (78.6% Fibonacci retracement). Immediate support now lies at 1.2620 (5-day moving average). A sustained break above 1.2750 could see the pair targeting the psychological 1.3000 mark, especially if UK economic data continues to outperform expectations.
GBPUSD
DXY
Sentiment:
Very Positive
Source: Marketaux
The euro is gaining ground against the U.S. dollar in early trading, with EUR/USD rising 0.2% to 1.0820 on reports that the European Union and United Kingdom have reached an outline deal to bolster bilateral relations. The agreement, expected to be finalized at an upcoming meeting, aims to foster closer cooperation across various sectors post-Brexit. This development has injected positive sentiment into the euro, as improved UK-EU ties could support economic stability and growth in the region. However, the U.S. dollar remains pressured following Moody's recent downgrade of the U.S. credit rating, citing fiscal and institutional challenges. Traders now await key U.S. economic data releases later this week, including GDP and PCE inflation figures, for further insights into the Federal Reserve's monetary policy trajectory. EUR/USD faces immediate resistance at 1.0850, with a break above potentially opening the door for a test of the 1.0900 psychological level.
EURUSD
Sentiment:
Positive
Source: Finnhub
The U.S. dollar has opened the week on a soft note against the Japanese yen, with USD/JPY declining 0.3% to 138.40 following Moody's downgrade of the United States' credit rating from Aaa to Aa1. The rating agency cited rising fiscal vulnerabilities and expected further deterioration in the country's debt and fiscal metrics as key drivers behind the move. This development has weighed on the greenback, as concerns grow over the long-term economic implications of elevated government debt levels. Meanwhile, other Asian currencies have seen muted trading, with investors cautiously assessing the potential spillover effects of the U.S. rating downgrade on regional markets. USD/JPY now faces support at 138.00, with a breach potentially leading to a deeper correction towards 137.50. Traders will closely monitor U.S. Treasury yields and risk sentiment for further direction, while also keeping an eye on any potential response from U.S. policymakers to address fiscal challenges.
USDJPY
Sentiment:
Negative
Source: Marketaux
In comments on China's economic outlook, a National Bureau of Statistics spokesman expressed confidence in the country's ability to navigate various challenges, including trade frictions. The spokesman noted that foreign trade enterprises have increased their capacity to develop markets and adjust to fluctuations. However, he acknowledged that current overall low prices will pressure enterprises and affect income growth, while structural contradictions in employment, especially for youth, remain prominent. Despite these headwinds, the spokesman asserted that China has the conditions, ability, and confidence to deal with the difficulties through strengthened policy coordination. The overall tone suggests cautious optimism, recognizing near-term hurdles but emphasizing China's economic resilience and policy tools to support growth and stability.
USDCNH
USDCNY
Sentiment:
Neutral
Source: Finnhub