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Wednesday, January 4th
The EUR/USD remains flat in early Europe. Yesterday the main currency pair fell for nearly 150 pips refreshing its 14-year lows at 1.0340 level on the back of increased demand for the greenback and positive US data. However, euro bulls have managed to recover part of pair’s losses, lifting the major back above the level of 1.04. Currently the EUR/USD pair is trading in a narrow range, having posted its daily highs and lows at 1.0424 and 1.0390 spots, closely tracking consolidating phase of the US dollar index. However, in mid-term perspective the pair will continue to stay suppressed as expectations of increase in growth rate of the US economy are significantly supporting the greenback, while ongoing Italian banking crisis continues to weaken the euro.
Seems that the pound has recovered a smile on Wednesday recovering most part of its losses against the US dollar. Yesterday the GBP/USD pair fell to its 2-month lows, marked at 1.2199 spot, as strong buying interest around the greenback approached the market. However, bears failed to take the pair under its total control as positive data from UK’s economy limited further downward moves. Currently the pair is trading in the region of 1.2270 expanding its recovery from yesterday’s lows. Later today, the pair will be influenced by the UK construction PMI report and Fed minutes while risk-on moods will continue to support the Sterling during this day.
Today the dollar/yen pair is trading in a positive mood as better tone around higher-yielding assets is supporting the pair lately. However, seems that US bulls have taken a breather allowing the pair to consolidate its previous gains around the level of 118.00. Nothing much is scheduled in data calendar for the pair, as only FOMC Meeting Minutes, released during late NA session will be able to bring short-term trading opportunities for markets participants, so US dollar’s price dynamics and risk-on sentiments will remain as key drivers for the pair on Wednesday.
The Loonie has regained a smile today against its American peer as the greenback is losing a grip across the market. Currently the USD/CAD pair corrects lower after yesterday’s north-directed rally, boosted by bid tone around the US dollar and better results of the US economy. Moreover, better tone around oil prices is also supporting commodity-linked assets, such as the Loonie. Moving ahead, today the pair will continue to stay influenced by sentiments around the US dollar and oil price dynamics during this trading session, as only FOMC Meeting Minutes are scheduled in data calendar for the pair.
The main events of the day:
UK Construction PMI – 11.30 (GMT +2)
EU CPI – 12.00 (GMT +2)
FOMC Meeting Minutes – 21.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0261 R. 1.0563
USDJPY S. 116.44 R. 119.24
GBPUSD S.1.2138 R. 1.2356
USDCHF S. 1.0148 R. 1.0396
AUDUSD S. 0.7169 R. 0.7265
NZDUSD S. 0.6835 R. 0.7015
USDCAD S. 1.3365 R. 1.3489
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