EUR/USD has paused on Friday

EUR/USD has paused on Friday, after gaining ground on Thursday. Currently, the pair is trading at 1.1193, up 0.10% on the day. There are no German or eurozone events on the schedule. Today’s highlight is U.S. durable goods orders, with the markets braced for soft numbers. Durable goods orders is expected to decline 2.0% in April, after a strong gain of 2.7% in March. The core reading is expected to slow to 0.1%, down from 0.4% in the previous release. It’s Day 2 of the EU election, with results to be published on Sunday night, after all EU members have voted. How To Trade Forex Using Support and Resistance Levels It’s been a quiet month of May for EUR/USD. The currency posted a modest gain of 0.28% on Thursday, the strongest move in either direction this month. Friday could be a quiet day, unless durable goods reports yield unexpected results. The euro managed to scratch gains despite weak German numbers. Manufacturing PMI dropped to 44.3 in April, marking a fifth straight contraction. Services PMIs continue to point to expansion, but the April score fell to 55.0, down from 55.6 a month earlier. There is also concern about business confidence, as Ifo Business Climate slowed to 97.9, shy of the estimate of 99.2. This was the weakest score since January 2010. Germany and the eurozone are gripped in a slowdown, and this has dampened business confidence.

Euro-skeptics

This week’s election for the European parliament could have significance for the Brexit negotiations. Starting on Thursday, voters in the 28 EU countries (including the U.K.) will elect lawmakers to the European parliament. Key issues included the economic slowdown, Brexit and the rise in Euroskpeticism. Euro-skeptics increased their representation in parliament from 12% to 25% in the last election, and with the dramatic increase in strength of populist parties, this trend could well continue. The Brexit party, headed by Nigel Farage, is expected to do well, while the Conservatives could be trounced, adding to Prime Minister May’s woes. There have been rumors swirling about May being forced out in the next few days or weeks, and the government has delayed the withdrawal bill, which was scheduled to be voted on in parliament on June 4.

USD/JPY 5/22

USD/JPY has posted slight losses on Wednesday. In the North American session, the pair is trading at 110.29, down 0.18% on the day. In economic news, Japan released strong numbers. Core Machinery Orders climbed 3.8%, crushing the estimate of o.0%. This marked a 5-month high. Japan’s trade deficit narrowed to JPY 11.0 trillion, beating the estimate of JPY 12.0 trillion. In the U.S. today’s highlight is the minutes of the Federal Reserve’s policy meeting earlier this month. On Thursday, the U.S. releases unemployment claims.

British pound 5/22

The British pound fell against the euro and U.S. dollar as concerns grew that the U.K. has little ability to pass a Brexit plan that would govern its exit from the European Union.
The pound traded 0.3% lower against both the dollar and the euro at a recent $1.2661 and 0.8811 a pound, respectively. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, rose by less than 0.1% to a recent 91.28.
Investors are betting that British Prime Minister Theresa May's most recent plan to get Parliament to back her Brexit divorce package is unlikely to succeed, said Erik Nelson, a currency strategist at Wells Fargo Securities.
Ms. May is caught between hard-line Conservative Party members who want better terms than she has been able to wrangle from the EU, and European officials who are unwilling to soften their terms. Part of Ms. May's proposal Tuesday -- her fourth -- includes the potential for a second Brexit referendum and other concessions to entice opposition lawmakers to ratify the deal.

GBP/USD

GBP/USD has edged lower on Tuesday. Currently, the pair is trading at 1.2694, down 0.23% on the day. On the release front, Mark Carney’s testimony on inflation before a parliamentary committee has been cancelled. British CBI Industrial Order Expectations slipped to -10, weaker than the estimate of -6. This marked the lowest score since November, as manufacturing orders continue to decline. In the U.S., existing home sales is projected to climb sharply to 5.35 million.