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Thursday, December 8th
The USD/CAD pair corrects after yesterday’s massive rally triggered by BoC’s decision. As it was widely expected yesterday the Bank of Canada left its interest rate unchanged and presented a moderate economic growth outlook sending the pair to the lowest level since October, marked at 1.3208 spot. Moreover, pair’s decline was also supported by better tone in oil prices after higher-than-expected drop in oil inventories released straight away after the decision of the BoC. Expectedly today the pair will extend its corrective move as only secondary data releases are scheduled in data calendar from both sides.
The euro has paused its upside momentum and now is consolidating its gains in the pair with the greenback as traders remain cautious in anticipation of the ECB policy decision due later in the session ahead. Expectedly today the ECB won’t change its interest rate while extension of the QE program beyond March 2017 remains one of the most discussed questions of this day. Meanwhile, weaker tone in the US dollar and risk-on sentiments, triggered by strong Chinese trade data, will also influence the pair during this day.
The AUD/USD pair was unable to consolidate its positions above its key resistance level of 0.7500 stepping down to the region of 0.7490. Today the pair has come under fresh buying interest after Chinese trade balance showed strong results leaving behind poor Australian trade data. Later ahead in NA session US economy will release secondary data from labor market while volatility led by ECB monetary policy decision could also contribute to pair’s direction during European session.
The yen remains highly pressured this Thursday after mixed data from Japanese economy with poor GDP at the head. Moreover, increased risk-on sentiments boosted by auspicious trade data from China are also putting the USD/JPY pair under bullish pressure. Currently the major is extending recovery from its three-day lows marked at 113.12 spot and is eyeing to retake its key resistance of 114. Today the pair will keep following risk sentiments while ECB meeting during the European session will also have some impact across the FX market.
The main events of the day:
ECB Interest Rate Decision – 14.45 (GMT +2).
US Initial Jobless Claims – 15.30 (GMT +2)
ECB Press Conference – 15.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0684 R. 1.0802
USDJPY S. 112.86 R. 114.84
GBPUSD S. 1.2512 R. 1.2738
USDCHF S. 1.0038 R. 1.0126
AUDUSD S. 0.7393 R. 0.7527
NZDUSD S. 0.7068 R. 0.7214
USDCAD S. 1.3177 R. 1.3323
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