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Wednesday, April 12th
The EUR/USD pair came out of its flat corridor, that was witnessed in Asian, and now is navigating in North direction, supported by strong risk aversion sentiments. Broad risk-off moods remain lately as a key driver across the market amid ongoing geopolitical concern, that is fueled by warn of North Korea of a nuclear strike if the US will continue to provoke it and readiness of the US for an additional airstrike if Syria once again uses chemical weapons on civilians. Moreover, the US dollar’s retreat against its main competitors is also collaborating with pair’s bullish momentum this Wednesday. Nothing important is scheduled in data calendar for this trading session, so the major currency pair will continue to get influenced by risk trends during the day ahead.
The yen remains well bid in the middle of this week, showing outstanding performances across the market and forcing the USD/JPY major to refresh its 5-month lows at 109.35 level, as strong risk-off sentiments amid ongoing geopolitical tension, are supporting the yen, as a safe-haven currency. Recently the market witnessed another spike of risk aversion, after North Korea warned of a nuclear strike should the US continue to provoke them, while the US stated that they are remaining prepared in case if Syria continues to use chemical weapons against civilians. Moreover, lower-than-expected Chinese inflation report added to the risk-off tone, thereby weighing the USD/JPY pair this morning. Today amid relatively eventless data calendar the pair will continue to follow global risk trend, that will keep influencing the market in short-term prospect.
The USD/CAD pair managed to defend its key support level of 1.33 and now is trading with slight bullish bias. Seems that the pair has mostly ignored broadly bullish sentiments around oil prices and slight weakness in the US dollar, as we are heading toward BOC interest decision, that is scheduled on NA session. It is widely expected that the CB will keep its interest rate unchanged at 0.5%, but in view of recent positive results of Canadian economy any hints on rate increase will be highly supportive to the Loonie. Besides BoC Monetary Policy outlook investors will also pay attention to Crude Oil Inventories, that will be able to bring additional impetus on the pair later during this trading session.
The GBP/USD pair is consolidating its yesterday’s gains in upper bound of its weekly range, following upbeat UK data, seen last trading session. Currently the pair is trading in extremely tight range of 15 pips near 1.2490 level, as renewed wave of risk-off sentiments amid ongoing geopolitical concerns is limiting any GBP gains. On the other hand, slight softness of the US dollar, witnessed during this week, is providing support to the pair. Now immediate focus shifts toward bloc of crucial data from UK labor market and BoE Governor M.Carney speech, that are scheduled on European trading session, while the US docket will remain relatively silent today, leaving the pair at the mercy of global market’s sentiments during NY trades.
The main events of the day:
UK Average Earnings Index +Bonus – 11.30 (GMT +3)
BoE Governot M.Carney speech – 11.30 (GMT +3)
UK Claimant Count Change – 11.30 (GMT +3)
BoC Interest Rate Decision – 17.00 (GMT +3)
US Crude Oil Inventories – 17.30 (GMT +3)
BoC Governor S.Poloz speech – 18.15 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0552 R. 1.0656
USDJPY S. 108.70 R. 111.38
GBPUSD S. 1.2368 R. 1.2556
USDCHF S. 1.0036 R. 1.0112
AUDUSD S. 0.7455 R. 0.7535
NZDUSD S. 0.6912 R. 0.6990
USDCAD S. 1.3283 R. 1.3379
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