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Friday, February 10th
The dollar/yen pair is experiencing pretty volatile trades lately, as various factors are pushing the pair in north direction at the end of this week. Ongoing rally, triggered by recent US President’s talks of upcoming tax reforms, that could be implemented over next weeks is still supporting the greenback across the market. Moreover, recent BOJ announcement of expanding its bond purchases is also supporting the pair last few days. And finally, fresh wave of risk-on sentiments, triggered by significant surplus in China’s Trade balance coupled with Trump’s talks over the tax cuts, is also benefiting to the pair today. Currently the pair is trading in the around 113.70 handle, having slowed down its massive rally from yesterday’s lows, marked at 111.72 spot, as traders are getting cautious ahead of US-Japan summit, that will be closely watched for next leg of directional move. Nothing else left in this week’s docket, so the pair will continue following broad RO-RO trend during this Friday.
The Aussie remains bullish today against its American competitor, despite strong demand for the US currency. The AUD/USD pair continues benefiting from auspicious China’s Trade Balance report, with both stronger-than-expected imports and exports. Moreover, better tone around higher-yielding assets is also supporting the pair lately. On the other hand, ongoing rally of the US currency, led by recent Trump’s promises of upcoming tax cuts, is limiting major’s upside traction lately. Looking ahead, traders will find only secondary data in today’s docket, so the pair will continue to trace global market’s sentiments to determine its further direction.
The EUR/USD pair remains in a red zone this morning, consolidating its recent loses around mid-point of 1.06. Seems that US bulls are still full of steam, limiting any attempt of the pair to recover. Yesterday US President D.Trump made a statement about plans of implementing tax reforms in next 2-3 weeks, which according to him will be “phenomenal”, that refueled investors’ expectations of boost in US economic growth rate under his presidency. Moreover, improved risk environment, led by Chinese trade data, is also capping the pair in a red zone. The major will remain at the mercy of USD dynamics at the end of this week amid a lack of fundamentals from both economies.
The GBP/USD pair is losing ground, following global market’s sentiments this Friday. Currently the pair is trading in south direction, refreshing this day lows at 1.2467, after brief recovery phase, in response to recent D.Trump’s announcement of further tax cuts. However, optimism among investors on Brexit negotiations and better tone around riskier assets, triggered by China’s trade figures, are supporting the pound, slowing down pair’s further fall. Today UK will release bloc of macroeconomic reports with Manufacturing Production in the lead role, while US data calendar contains only secondary reports at the end of this week.
The main events of the day:
UK Manufacturing Production – 11.30 (GMT +2)
Employment Change in Canada – 15.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0612 R. 1.0730
USDJPY S. 111.14 R. 114.38
GBPUSD S. 1.2431 R. 1.2613
USDCHF S. 0.9908 R. 1.0072
AUDUSD S. 0.7579 R. 0.7685
NZDUSD S. 0.7114 R. 0.7300
USDCAD S. 1.3063 R. 1.3209
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