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Thursday, March 2nd
The EUR/USD pair corrects higher in early Europe after strong decline, seen yesterday. On Wednesday the pair came under bearish pressure after Federal Reserve board member L.Brainard delivered her speech, stressing that the US economy has almost reached its inflation and employment target levels, so Fed interest rate increase at upcoming FOMC meeting will be reasonable. Additionally, speculations around M.Le Pen’s win in French elections are also weighing the common currency as of late, thereby limiting any attempts of the pair to recover its ground. Today only Eurozone flash CPI data will be able to determine next leg of directional move of the pair, as the US event calendar contains only second tier data for this Thursday.
Seems that the AUD/USD pair has lost its downside momentum and now is attempting to recover part of its position, as US bulls took a breather in Asia. The pair once again came under strong selling pressure this Thursday, refreshing its daily lows at 0.7644 spot, as Australian trade balance figures came significantly lower market’s expectations. However, the pair managed to recover some pips, as the USD is consolidating its bullish rally, allowing the pair to retake 0.7660 level. Nothing important is scheduled in today’s docket for the pair, so USD price dynamics will remain as a key driver for the major during this trading session.
The USD/CAD pair extends its strong bullish rally, gaining about 280 pips since Monday’s lows. Currently the pair is trading around mid-point of 1.33 level, benefiting from another Fedspeaker’s L.Brainard “hawkish” comments, who believes that rate hike at upcoming FOMC meeting would be appropriate, thereby lifting prospects that the refi rate will be increased this month. Moreover, eventless BoC meeting, witnessed yesterday, was unable to support the Looney, while softer tone around oil prices, despite smaller increase in US oil inventories, is also collaborating with pair’s upside run. Today traders will focus their attention on the CAD GDP report, while the US will release only second tier data this Thursday.
The NZD/USD pair is showing quiet choppy trades this Thursday, as recent events strike the pair from both directions. Hawkish comments of Fed member L.Brainard have increased chances of Fed interest rate hike this month, thereby strongly supporting the USD across the board. On the other hand, the market continues to digest recent talks of RBNZ Governor G.Wheeler, who noted that NZ interest rate can be adjusted in both ways, depending on further economic developments. By time of writing the pair was trading around 0.7120 level, keeping its downside direction, as better tone around the greenback continues to influence the market.
The main events of the day:
UK Construction PMI – 11.30 (GMT +2)
EU prelim. CPI – 12.00 (GMT +2)
Canadian GDP – 15.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0475 R. 1.0625
USDJPY S. 112.13 R. 114.83
GBPUSD S. 1.2200 R. 1.2450
USDCHF S. 1.0013 R. 1.0165
AUDUSD S. 0.7607 R. 0.7733
NZDUSD S. 0.7052 R. 0.7240
USDCAD S. 1.3248 R. 1.3396
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