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Daily economic digest from Forex.ee

7 April 2017, 12:26

EEAnalytics

Daily economic digest from Forex.ee

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Friday, April 7^th

This morning the USD/JPY pair fell to its nearly 2-week lows in wake of another sharp spike of risk aversion across the market. Today it became known that US President D.Trump ordered to strike Syrian airbase in response to Syria's use of chemical weapons against civilians. In his official statement D.Trump called all civilized nations to seek for the end of slaughter and bloodshed in Syria. This crucial news triggered huge wave of risk-off sentiments, sending the pair to refresh its lows at 110.13, which were last seen only last Monday. At this moment the pair has managed to correct its positions, recovering part of its losses, as the dust around geopolitical tensions is slowly settling down, however, cautious state of the market will continue to cheer up safe-haven assets, such as the yen, ahead of crucial NFP report and the second round of the US-China Summit, which outcome has the potential to trigger a fresh wave of volatility across markets.

The EUR/USD pair is trading with a bearish bias at the end of this week, staying pressured, as the markets are still digesting Thursday’s ECB President M.Draghi’s message. Yesterday Draghi delivered a speech, in which he once again mentioned low inflation level in euro area, also adding that reassessment of current monetary policy is not reasonable at this stage. Moreover, seems that EUR bulls are totally ignoring global market’s risk-off trend, triggered by the US missile strike in Syria in response to Islamic state’s use of chemical weapons against civilians, failing to provide any support to the pair. Today all eyes will remain on much awaited the US NFP report, while US-China Summit will also stay in sight of traders, as its outcome will be able to shape market’s sentiments in short-term projection.

The GBP/USD pair remains pressured in the region of 1.2450 – 70 at the end of this week, having erased all its yesterday’s gains on the back of ongoing risk aversion. Latest headlines that the US bombed Syria after Islamic state engaged into a chemical attack against civilians, reignited strong risk-off sentiments, thereby weighing the pound. Furthermore, any recovery of the pair seems unlikely, as ongoing cautiousness in wake of the Trump-Xi Summit is also pressuring on higher-yielding GBP. Looking ahead, today we have heavy packed economic data calendar, with UK Manufacturing Production, M.Carney’s speech and crucial data from the US labor market, that will be able to determine pair’s further direction in upcoming day.

The AUD/USD pair accelerates its bearish momentum this Friday on the back of intensifying risk-off sentiments. Currently the pair is trading within striking distance of its monthly lows, located at 0.7522 spot, as news that the US bombed Syrian airbase, triggered huge wave of risk-off moods, driving flows away from higher-yielding assets, such as the Aussie. Moreover, increasing cautiousness in wake of the Trump-Xi Summit and slightly bearish tone around copper prices, seen lately, are also collaborating to pair’s bearish momentum. Today all traders’ attention will remain glued to the US crucial jobs report, that is expected to show positive numbers, as employment data from ADP, seen earlier this week, is cheering up investors’ expectations, while strong risk aversion will continue to rule global market’s sentiments during this trading session.

The main events of the day:

UK Manufacturing Production – 11.30 (GMT +3)

BoE Governor M.Carney’s speech – 12.00 (GMT +3)

US Nonfarm Payrolls – 15.30 (GMT +3)

US Unemployment Rate – 15.30 (GMT +3)

Canadian Employment Change – 15.30 (GMT +3)

BoC Governor S.Poloz’s speech – 17.00 (GMT +3)

Canadian Ivey PMI – 17.00 (GMT +3)

Support and resistance levels for the major currency pairs:

EURUSD S. 1.0596 R. 1.0708

USDJPY S. 109.89 R. 111.59

GBPUSD S. 1.2419 R. 1.2529