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Monday, March 20th
The EUR/USD pair remains positive at the start of this week amid broadly based greenback’s sell-off. The pair regains its region of five-week highs, reached during last trading session at 1.0782 spot, as the US currency is still broadly weakened by recent less hawkish Fed’s outlook on its interest rate. Moreover, news that E.Macron keeps leading in the French election race are also supporting the common currency. Nothing much is scheduled in data calendar from both sides, so USD price dynamics will remain as a key driver for the EUR/USD at the start of this week.
The Aussie continues to use broad dollar’s weakness, lifting the AUD/USD pair to its 5-month highs, posted at 0.7748 spot. Currently the pair is trading within striking distance of its recent tops, as the market remains influenced by last week’s cautious comments of Fed Chair J.Yellen. However, huge drop in commodities, especially in copper, that reached its 5-month lows, is limiting further Aussie’s gains on the back of recent G20 summit’s outcome. The Group of Twenty surprised investors by excluding any mentions from its communique of fighting against protectionism and its traditional endorsement of open trades, thereby broadly weighing commodity market. On the data space, the economic calendar will remain relatively silent today, leaving the pair at the mercy of global market’s sentiments on Monday.
The GBP/USD pair broke out of its consolidation phase on European opening and now is extending its bullish run, as investors continue to digest recent economic events. Last week both CBs held meetings, where Fed increased its interest rate, however, market’s participants considered FOMC meeting outcome as dovish on the back of cautious comments of Fed Chairwoman J.Yellen. Meanwhile, BoE members voted 8-1 to leave its refi rate unchanged, whit 1 vote for a rate hike, that left doors opened for further BoE monetary policy tightening. However, today any sharp moves of the pair will be limited, as traders remain cautious ahead of the final trigger of Article 50 after recent developments from both the House of Lords and the House of Commons. Today the pair will keep following global market’s sentiments amid absence of any important releases, scheduled in data calendar of this Monday.
The USD/CAD pair changes its course at the start of this week, easing part of its recovered positions. Seems that US dollar’s bulls are out of steam this Monday, allowing the pair to regain its down sided direction, as the market is still digesting dovish FOMC meeting’s outcome, witnessed on Wednesday. On the other, softer tone around oil prices is negatively influencing commodity-linked Looney, thereby limiting pair’s further drop. Looking ahead, today only secondary data reports will be released from both neighbor economies, so the pair will continue to follow global market’s trend to set up its further course.
The main events of the day:
Japan - Spring Equinox Day
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0693 R. 1.0803
USDJPY S. 111.96 R. 113.82
GBPUSD S. 1.2292 R. 1.2454
USDCHF S. 0.9925 R. 1.0013
AUDUSD S. 0.7640 R. 0.7748
NZDUSD S. 0.6945 R. 0.7075
USDCAD S. 1.3266 R. 1.3416
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