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Thursday, January 5th
The Euro remains bullish this Thursday against its American counterpart leaving behind multi-year lows, witnessed at the start of this week. Currently the EUR/USD major is trading around the mid-point of 1.05 level extending its yesterday’s northern progress on the back of mixed sentiments around FOMC Meeting Minutes. Fed minutes showed concerns of FOMC members about further inflation growth pace, as D.Trump’s taxation program could bring some uncertainty in further developments around the US economy. Today’s docket remains full of events, as ECB will publish its Account of Monetary Policy Meeting, while the US economy will release ADP Nonfarm Employment Change and ISM Non-Manufacturing PMI providing investors with fresh short-term trading opportunities.
The Loonie significantly outperforms the greenback in the second half of this week. Currently the USD/CAD pair is trading around 1.3270 spot losing more than two cents and moving away from yesterday’s tops on the back of weakened greenback’s positions, as Fed is losing its post-rate increase hawkishness after mixed FOMC Meeting Minutes seen yesterday. Moreover, better tone around oil prices witnessed after significant drop in US stockpiles by API also underpins commodity linked assets lately. Eventful session due this Thursday with bloc of data from both sides, while tomorrow’s release from the US labor market slowly begins to attract traders’ attention.
Today the GBP/USD continues to drive in north direction as Fed minutes appeared not so hawkish as it was expected. Yesterday FOMC Meeting Minutes showed that most of policymakers are doubting efficiency of further tax cuts under D.Trump’s presidency. Implementation of such measures regarding the US economy could bring more uncertainty around further inflation growth pace, that expectedly will trigger next rate increases that were discussed previously. Moreover, risk-on sentiments seen lately will also provide the pound with extra wings during this session. Next for note remain UK Services PMI and data bloc from US economy, while center stage of this week will take US NFP that will be released this Friday.
Today the USD/JPY pair follows broad market’s sentiments expanding its bearish rally despite better tone around higher-yielding assets. At the moment of writing the pair was trading in the region of three-week lows at 115.89 level, as sharp sell-off around the greenback continues to drive the pair in red zone. Yesterday’s Fed minutes revealed uncertainty surrounding the economic implications of next US president’s fiscal measures. Now focus shifts on US ADP Nonfarm Employment Change and ISM Non-Manufacturing PMI while US dollar’s price dynamics will remain as key driver for the pair during this Thursday.
The main events of the day:
UK Services PMI – 11.30 (GMT +2)
US ADP Nonfarm Employment Change – 15.15 (GMT +2)
ISM Non-Manufacturing PMI – 17.00 (GMT +2)
US Crude Oil Inventories – 18.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0349 R. 1.0569
USDJPY S. 116.35 R. 118.61
GBPUSD S. 1.2165 R. 1.2429
USDCHF S. 1.0143 R. 1.0323
AUDUSD S. 0.7187 R. 0.7333
NZDUSD S. 0.6857 R. 0.7029
USDCAD S. 1.3170 R. 1.3520
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