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Friday, February 24th
The EUR/USD pair extends its recovery from 1-1/2 month lows, posted just a few pips below 1.05 level on Wednesday, and now is trading at 1.0598 spot. Pair’s strong recovery could be explained by lack of details on Trump’s “phenomenal” tax reforms in recent US Treasury Secretary S.Mnuchin’s speech, that has only intensified sell-off around the dollar. Moreover, recent FOMC Meeting Minutes, classified by market as dovish in response to lack of any indicators on Fed rate hike’s date, continue to fuel broad dollar’s retreat. However, growing concerns over French elections and economic situation in Greece are limiting pair’s further gains. Today the docket of Eurozone will keep silence, while the US economy will publish only New Home Sales report during NY trades, so the pair will continue to follow global markets sentiments until the US release.
The dollar/yen pair fails in several attempts to recover this morning, keeping its range below 113 mark. Yesterday another wave of offers hit the dollar, forcing it to retreat across the board, after US Treasury Secretary S.Mnuchin during his speech failed to unveil further details on D.Trump’s tax reforms, stressing that they will be implemented by August, 2017. Moreover, ongoing dollar’s weakness, triggered by cautious FOMC Meeting Minutes, is also suppressing dollar’s positions as of late. Today only data from US housing market will be able to determine next leg of directional move for the pair in NA session, but until then the pair will continue to trace global market’s trend.
The Aussie is outperforming the greenback on all fronts this Friday. The AUD/USD pair caught fresh bids in early Asia after RBA Governor P.Lowe delivered his speech, damping expectations of RBA’s further rate cuts. Moreover, higher commodities, especially copper prices, and broad weakness around the buck are significantly supporting the major. However, AUD/USD pair was last seen trading around 0.7710 level, retreating from its multi-month highs posted at 0.7740 handle, as bulls seem to be exhausted, allowing the greenback to recover some ground. Later in the day, the US economy will release New Home Sales, while further pair’s recovery seems to be unlikely, as traders will continue to perform profit-taking actions at the end of this week.
The USD/CAD pair is following global market’s trend and extends its rally below 1.3100 level at the end of this week. Cautious FOMC Meeting Minutes and growing uncertainty around US president D.Trump’s fiscal policy remain as key drivers across the market, driving the major into red territory. Even softer tone around oil prices, despite better-than-expected Crude Oil Inventories numbers by EIA, can’t provide enough support to US bulls. Looking ahead, Canadian Core CPI and US New Home Sales will be able to bring some trading opportunities to investors later in NA session.
The main events of the day:
Canadian Core CPI – 15.30 (GMT +2)
US New Home Sales – 17.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0513 R. 1.0629
USDJPY S. 111.96 R. 113.78
GBPUSD S. 1.2381 R. 1.2647
USDCHF S. 1.0014 R. 1.0140
AUDUSD S. 0.7631 R. 0.7781
NZDUSD S. 0.7142 R. 0.7290
USDCAD S. 1.3031 R. 1.3205
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