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Monday, December 12th
On Sunday 13 non OPEC members agreed to cut its oil outputs in total by 558kbpd, most of which (300kbpd) will take Russia. This amount of cuts will be added to total OPEC agreed oil production cuts of 1.2mbpd. The total volume of oil output cuts is amounting to nearly a 2% of global oil supply. Reacting on that oil prices have refreshed its tops on levels last seen in July 2015. Moreover, inspired by oil price rally commodity-linked currencies such as CAD and AUD have also benefited from the latest headlines. Currently the USD/CAD pair is trading near its 2-moht low, marked at 1.3112, while the Aussie has also recovered a smile against its American counterpart regaining some pips after downside rally witnessed last Friday. And now the AUD/USD pair now is hovering in region of 0.7450 level.
And once again the yen fell under bearish pressure allowing the USD/JPY pair to refresh it 10-monht highs at 115.80 spot. This morning the yen had performed some recovery moves on the back of upbeat Japanese data, but soon have come under strong bearish pressure as fresh wave of risk hunger, triggered by the latest headlines of oil production cuts, approached the market. Moreover, today the USD/JPY pair will continue to stay under bullish pressure as ongoing talks of Fed’s policy tightening is strongly supporting the US dollar.
The EUR/USD continues to stay in the region of this year lows just below 1.0570 handle. Today the euro is still losing positions against its American peer as traders continue to digest extension of ECB’s QE program. Moreover, prevailing risk-on sentiments, triggered by oil price rally, and broadly stronger US dollar, supported by ongoing speculations of Fed’s hawkish decision, will continue to drive the pair during this trading session restricting it from any sharp upper moves.
The pound is trying to recover a smile in the pair with US dollar amid risk positive environment led by oil price rally. Seems that pound bulls were able to break its streak of losses today as non OPEC members have agreed to support cartel of oil producers by limiting its oil output. However, market’s expectations that Fed will tighten its monetary policy is limiting pair’s north directed moves. Nothing much is scheduled for the pair in data calendar for today, so the pair will continue to trade driven by USD dynamics and risk trends during this trading session.
The main events of the day:
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0472 R. 1.0670
USDJPY S. 113.52 R. 116.24
GBPUSD S. 1.2513 R. 1.2649
USDCHF S. 1.0118 R. 1.0238
AUDUSD S. 0.7399 R. 0.7519
NZDUSD S. 0.7085 R. 0.7211
USDCAD S. 1.3119 R. 1.3241
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