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Wednesday, March 29th
The GBP/USD pair fell for more than two cents from yesterday’s highs and now is consolidating its sharp decline in the region of 1.2400 level, as traders remain unkind to the pound ahead of formal beginning of separation process between UK and Eurozone. Today all market’s attention will be focused on developments, surrounding the Article 50 trigger, as the UK PM T.May has already signed official notice that Britain is leaving EU and has sent it to European Council President D.Tusk, who will hold a press conference in European afternoon, announcing that negotiations on Brexit process will officially start. Beside Brexit process start, today the US economy will release data from housing market, while traders’ reaction on it will be limited in wake of more crucial events of this Wednesday.
The EUR/USD pair is trading near its lower bound of this week, as bears continue to keep control over the major. Currently the pair is trading in south direction, breaking below the level of 1.0800, in wake of the broadly stronger greenback, underpinned by positive US macro data on Tuesday, hawkish Fedspeaks and solid gains in the pair with the pound. Today all eyes will be set up on developments surrounding Article 50 during the European session, accompanied with UK PM T.May’s speech, while traders will also be able to catch some pips after release of the US Pending Home Sales report, that is scheduled on NA trading session.
The AUD/USD pair staged a solid comeback from its two-week lows, marked yesterday at 0.7587 spot, however, further pair’s growth remains unlikely in wake of lack of bullish momentum. Seems that Aussie’s bulls are still having some steam in early Europe despite ongoing weakness in copper and renewed buying interest around the greenback, underpinned by yesterday’s upbeat US economic data. Moreover, strong nervousness ahead Article of 50 trigger is also driving flows away from higher-yielding assets, such as Aussie. Looking ahead, only US Pending Home Sales are scheduled in data calendar for this Wednesday, so the pair will continue to follow global markets sentiments to determine its further direction.
The dollar/yen pair remains consolidative in early Europe after strong bullish rally, seen this Tuesday. Yesterday the pair came out of its region of multi week lows in response to strong gains of the US dollar vs. its British competitor, as traders preferred to close their GBP longs ahead of Article 50 trigger. Today developments around Brexit process are expected to drive global markets sentiments, supporting safe-haven assets, such as the yen. Additionally, data from the US housing market will also be able to bring some impact to the pair later in NA session.
The main events of the day:
UK Prime Minister T.May’s speech – 14.30 (GMT +2)
US Pending Home Sales – 17.00 (GMT +2)
US Crude Oil Inventories – 17.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0754 R. 1.0902
USDJPY S. 109.82 R. 111.86
GBPUSD S. 1.2340 R. 1.2652
USDCHF S. 0.9793 R. 1.0001
AUDUSD S. 0.7558 R. 0.7692
NZDUSD S. 0.6981 R. 0.7065
USDCAD S. 1.3322 R. 1.3444
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