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Monday, June 19th
The EUR/USD par lost its upside momentum in early Europe and stepped away from the level of 1.1200 toward the region of 1.1180 amid attempts of the US dollar to recover its positions after Friday’s decline. The pair gained positive trend in Asia on the back of news that French President E.Macron’s party has obtained an absolute majority in the French parliament following the second round of legislative elections on Sunday, thereby supporting the euro across the market. However, the pair has lost its bullish momentum, as now all eyes shift toward the Brexit talks, which will take place later today. Besides start of Brexit negotiations, nothing important is scheduled in data calendar for this Monday, so the pair will keep up with broad market’s trend in anticipation of the major event.
The GBP/USD pair was following market’s trend throughout this Asia and showed lack of momentum, staying within 20 pips range of 1.2760-80. Moreover, the pair met additional pressure this morning amid increased cautiousness across the market, as UK PM T.May is due to start Brexit negotiations with the EU today. Expected that the UK leaders will vote in favor of “Soft Brexit”, as the Conservatives failed to gain majority of seats on the recent UK general election. Adding to that, latest headlines of another potential terrorist attack in London have also added some bearish pressure on the pound this morning. Nothing much is scheduled in data calendar for this Monday, so any developments surrounding Brexit negotiations will be able to shape up pair’s further direction.
The AUD/USD pair was showing subdued trades at the start of this week, however, remaining within striking distance of its 2-month highs, posted last week at 0.7635 spot. In Asia, the pair managed to gain some pips in wake of slightly hawkish tone of RBA Governor P.Lowe, who noted that Australian economy still has big potential for further growth. However, the pair lost its bullish momentum and eased part of its its previous gains, as Mr. Lowe also stated that weaker results from labor and housing markets are capping economy growth pace. Adding to that, the US dollar is attempting to recover some points after negative results of the US economy, released last Friday, that could accelerate pair’s downside trend. Today we have relatively silent economic calendar, so US dollar’s price dynamics will continue to determine pair’s trading course during this trading session.
The USD/JPY pair managed to recover a smile this morning, as the US dollar is trying to regain its positions after Friday's disappointing US housing data. Moreover, the yen met additional bearish pressure this Monday after Japan revealed red numbers of trade balance, thereby also collaborating with pair’s upside. Adding to this, prevalent risk-on moods, seen in the Asia, was also supportive to the pair, driving away flows from the safe-haven assets. On the other hand, Brexit negotiations, which are going to start today, will be able to shrink market’s risk appetite, stirring up demand for the yen. In absence of any major market moving economic releases, the pair will continue to trace global market’s trend for any direction ahead today.
The main events of the day:
None
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1114 R. 1.1240
USDJPY S. 110.20 R. 111.74
GBPUSD S. 1.2720 R. 1.2830
USDCHF S. 0.9709 R. 0.9771
AUDUSD S. 0.7553 R. 0.7661
NZDUSD S. 0.7173 R. 0.7295
USDCAD S. 1.3167 R. 1.3295
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