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Wednesday, February 15th
Once again the EUR/USD pair has come under bearish pressure after brief recovery during Asian trades, as Fed Chair J.Yellen’s testimony is still suppressing the market. Yesterday during the Q&A session at Senate Banking Committee, Fed Chairwoman J.Yellen said that it would be reasonable to hike rates in upcoming months, however, noting that she cannot say which month would be the most appropriate for next rate increase. Moreover, Yellen’s hawkish outlook restored confidence on US economic growth prospects under D.Trump’s presidency. Currently the main currency pair is trading around the level 1.0550, having lost a smile in early Europe. Looking ahead, another busy NA session is approaching the market, while EU docket contains only trade data, which most likely won’t have any impact on the pair.
The GBP/USD pair remains in the region of its recent lows after double trouble, experienced yesterday. On Tuesday the pair lost a cent in wake of disappointing UK inflation figures that came lower markets expectation, sending the pair to test 1.2443 level. Moreover, any attempts of recovery were limited by following hawkish Fed Chairwoman J.Yellen’s testimony, that improved market’s appetite for US rate hikes. By the time of writing the pair was trading at 1.2455, awaiting for UK data from labor market, while batch of US releases, scheduled on NA session, will also bring fresh trading opportunities to investors.
The Aussie has recovered most part of its losses vs. its American counterpart from post-Yellen lows. Yesterday the AUD/USD pair fell sharply, following global market’s sentiments, based on Fed Chair J.Yellen’s hawkish comments. During her speech Yellen stressed that waiting too long to hike rates could be unwise, thereby living doors opened for further rate increases in upcoming FOMC meetings. However, the pair managed to recover a smile right after crucial events, as significant risk hunger, seen in Asian, underpinned sentiments around higher-yielding currencies, such as Australian dollar. Today second round of J.Yellen’s testimony will overshadow any other events scheduled in data calendar for this Wednesday.
Seems that US bulls have lost momentum somewhat allowing the USD/CAD to retreat from its session highs. Currently the pair is trading around flat line in the area of 1.3070 down from its session peaks, posted at 1.3095 handle, despite greenback’s bid tone, based on J.Yellen’s hawkish comments and softer crude oil prices. Another eventful session is scheduled for the pair this Wednesday with US inflation reports, US retail sales, crude oil inventories by the EIA and the second testimony by Yellen before the House Financial Services Committee that will take center stage in NY session.
The main events of the day:
UK Average Earnings Index +Bonus – 11.30 (GMT +2)
UK Claimant Count Change – 11.30 (GMT +2)
US Core CPI – 15.30 (GMT +2)
US Core Retail Sales – 15.30 (GMT +2)
US Retail Sales – 15.30 (GMT +2)
Fed Chair J.Yellen Testimony – 17.00 (GMT +2)
US Crude Oil Inventories – 17.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0517 R. 1.0663
USDJPY S. 112.76 R. 115.24
GBPUSD S. 1.2379 R. 1.2591
USDCHF S. 1.0006 R. 1.0112
AUDUSD S. 0.7581 R. 0.7737
NZDUSD S. 0.7103 R. 0.7229
USDCAD S. 1.2985 R. 1.3149
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