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Tuesday, December 20th
And another rate decision approached the market this morning. The BOJ left its interest rate unchanged at -0.1% with upbeat outlook of the economy. In its monetary policy statement, the BOJ increased its prospects of GDP and inflation growth rates for 2017. However, positive statement of the BOJ failed to provide the USD/JPY pair with any bearish momentum as investors had already priced-in any hawkish comments of BOJ members by that time. Moreover, the pair has strengthened its bid tone after head of the BOJ H.Kuroda reiterated that the Japanese CB is ready to adjust its monetary policy to reach its inflation target level. Currently the major is trading above the level of 118 moving away from its overnight lows marked just a few pips away from 117 level.
Seems that Australian bulls ignored neutral RBA Meeting Minutes that came in Asia. However, the Aussie is still able to maintain its better tone against American counterpart as prevalent risk-on moods triggered by BOJ interest rate decision are supporting risk associated assets such as Australian dollar. However, inbound demand for the US currency is limiting pair’s upside traction and expectedly will drive the pair during this trading session amid lack of fundamentals from both sides.
The EUR/USD pair continues to lose its points staying pressured in the area of its 14-year lows. Currently the major currency pair is trying to consolidate its overnight losses around 1.0390 spot as better risk tone triggered by BOJ interest rate decision and renewed demand for the greenback are limiting pair’s attempts for immediate recovery. Moreover, nothing important is scheduled in data calendar from both sides so the pair will continue to trade influenced by global market sentiments driven lately by US dollar’s dynamics.
The Kiwi remains well offered against the US dollar for the fifth session in a row. Currently the NZD/USD pair is expanding its bearish trend staying within striking distance of 0.6900 support level as returning demand for the US currency is limiting pair’s attempts for any rebound. Yesterday Fed Chairwoman J.Yellen’s hawkish comments on stronger labor market have reinforced expectations of further US economy tightening. Today the NZD/USD pair will continue to stay under bearish control, despite better risk tone as US dollar’s price-dynamics will drive the pair amid lack of any fundamentals in data calendar of this Tuesday.
The main events of the day:
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0338 R. 1.0512
USDJPY S. 115.78 R. 118.62
GBPUSD S. 1.2268 R. 1.2562
USDCHF S. 1.0195 R. 1.0319
AUDUSD S. 0.7196 R. 0.7336
NZDUSD S. 0.6884 R. 0.7010
USDCAD S. 1.3277 R. 1.3487
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