The dollar rose against most major currencies on Friday after April US non-farm payrolls fell less than expected and the unemployment rate unexpectedly declined. Sterling fell following new signs of weakness in the UK housing market. The yen declined as risk appetite increased demand for carry trades. Today's US equity gains supported the dollar but pressured the yen. The dollar block currencies gained modestly on strength in the commodity market.
The Australian dollar was supported by higher-than-expected Australian retail sales. After two weeks of gains, the dollar is now at important resistance against most key currencies. It is possible the dollar's rally will continue; however, the market may need to consolidate gains. The Reserve Bank of Australia is expected to keep its cash target rate unchanged at 7.25% next week.
The EUR/USD made a new 5-week low on better-than-expected US data and weak European data; however, unable to penetrate the important 1.54-area support. The RSI indicator shows the pair is getting oversold likely requiring more time before breaking support. A break of the 1.54 support would be an important development, possibly setting a test of the support from the uptrend at 1.49.