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Tuesday, March 7th
The EUR/USD pair is attempting to recover from its overnight lows, located at 1.0573, but still keeps its range below the 1.06 level. Yesterday bid tone around the greenback picked-up pace across the market, fueling a fresh bout of selling interest behind the EUR/USD, as traders have started to price in Fed rate hike on the upcoming committee meeting. However, ongoing risk-off sentiments, fueled by geopolitical tensions surrounding North Korean missiles launch as military exercises with a view to a possible strike against US military bases in Japan, continue to support the common currency. Now immediate focus turns on EU GDP reports, while the US calendar remains data quiet this Tuesday. Besides, growing expectations of March Fed rate hike and developments surrounding French elections will also have a significant impact on the pair during this trading session.
The Aussie has eased part of its post-RBA gains vs. the greenback. As it was widely expected the RBA maintained its status quo and kept the bank rate unchanged at 1.5%, with following RBA Governor P.Lowe’s neutral statement on further economic growth pace. Currently the pair is trading at 0.7615, as softer tone in commodity space, especially around the iron, forced the pair to retreat from its recent highs, posted at 0.7632 spot. Today amid lack of fundamentals the pair will continue to trace USD price dynamics, as US bulls remain underpinned by growing chances of March Fed rate hike.
The dollar/yen pair once again came under selling pressure, as ongoing risk-off moods are still gripping the market. Yesterday it became aware that North Korea launched multiple missiles towards Japan, thereby triggering huge wave of risk aversions across the market. On the other side, according to agency Reuters, the probability of refi rate increase on upcoming Fed meeting, scheduled on the next week, is nearly 90%. Such numbers are provoking traders to price in hawkish Fed’s move, thereby strongly supporting the buck across the market. Looking ahead, the data calendar is absolutely empty this Tuesday, so risk trend and sentiments around the greenback will remain as key drivers for the pair during this trading session.
The GBP/USD pair is extending this week bearish trend in wake of intensifying Brexit concerns. The ongoing uncertainty over Brexit negotiations continues weighing the pair lately, as the House of Lords voted last week in favor of amending the bill, which should take into account interests of EU citizens residing in Britain after the country leaves the EU. Such bureaucracy may cause a delay in triggering article 50, which is scheduled at the end of this month. Today amid lack of fundamentals the major will keep following global market’s sentiments, influenced by Fed interest rate hike expectations as of late, while developments surrounding Brexit negotiation will also be able to trigger some pair’s sharp moves.
The main events of the day:
Canadian Ivey PMI – 17.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0533 R. 1.0663
USDJPY S. 113.27 R. 114.43
GBPUSD S. 1.2177 R. 1.2331
USDCHF S. 1.0050 R. 1.0164
AUDUSD S. 0.7547 R. 0.7625
NZDUSD S. 0.6954 R. 0.7064
USDCAD S. 1.3348 R. 1.3454
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