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Wednesday, January 18th
The GBP/USD pair has eased part of its yesterday’s huge gains and now is oscillating in 25 pips narrow range, posting its daily lows at 1.2327 spot. Yesterday the major performed massive upsurge for almost 4 figures on the back of strong and constructive talks of UK PM T.May. During her speech the policymaker insisted on keeping strong ties with EU, however, noting that “no deal is better than a bad deal”. Therefore, that T.May’s announcement has left some uncertainty on the EU’s possible response. Another eventful session is expected on this Wednesday, with UK wage growth data and US inflation reports.
Today the euro corrects lower against its American counterpart, moving the EUR/USD pair away from its six-week highs, marked above 1.07 level. Yesterday the main currency pair rose for more than a cent on the back of huge drop of the greenback in the pair with the pound. By the time of writing the major was trading in bearish trend, having refreshed its daily lows around the level of 1.0677, as traders continue to take profits off the table after aggressive sell-off, seen around the buck. Now focus shifts towards inflation reports from both continents and couple of Fedspeaks with J.Yellen’s speech in the main role.
Seems that the greenback has recovered a smile in the pair with the Loonie, after the USD/CAD pair faced resistance near the level of 1.30, which is the lowest level since October, 2016. On the other hand, the CAD remains silent on Wednesday, mostly ignoring slightly bullish tone around the oil prices ahead of BoC Interest Rate Decision. However, expectedly the BoC will leave its interest rate unchanged, while Bank of Canada’s policy tone could determine further pair’s direction. Moreover, bloc of data from the US economy with Fed Chairwoman J.Yellen’s speech will also be able to bring some impetus to the pair during NA session.
And finally the dollar/yen pair has lost its bearish momentum after seven consecutive sessions of south directed march. Currently the pair is trading around the level of 113.20, performing a minor comeback from its six-week lows, marked at 112.57 spot. Today the pair is trading on a positive note in wake of reignited risk appetite after key event of this week, seen this Tuesday. Japanese docket for this trading session remains absolutely empty leaving the pair in mercy of USD price dynamics, while US fundamentals, scheduled on NY session, will be able to bring short-term opportunities to investors.
The main events of the day:
UK Average Earnings Index +Bonus – 11.30 (GMT +2)
UK Claimant Count Change – 11.30 (GMT +2)
EU CPI – 12.00 (GMT +2)
US Core CPI – 15.30 (GMT +2)
BoC Monetary Policy Report – 17.00 (GMT +2)
BoC Interest Rate Decision – 17.00 (GMT +2)
BoC Governor S.Poloz’s speech – 18.15 (GMT +2)
Fed Chair J.Yellen’s speech – 22.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0553 R. 1.0799
USDJPY S. 111.48 R. 114.84
GBPUSD S. 1.1881 R. 1.2679
USDCHF S. 0.9921 R. 1.0165
AUDUSD S. 0.7429 R. 0.7637
NZDUSD S. 0.7053 R. 0.7301
USDCAD S. 1.2912 R. 1.3252
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