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Friday, April 21st
The EUR/USD pair came out of its brief consolidation phase, seen in Asia, and now is moving in north direction on the back of positive German data. Yesterday the pair was unable to sustain its bullish momentum and fell back to its comfort region, located near 1.07 spot, following positive remarks of US Treasury Secretary Steven Mnuchin, who stated, that upcoming tax reforms will be implemented before the end of this year. However, the pair was able to gain a bullish momentum in early Europe in wake of upbeat results of flash German Manufacturing PMI. Meanwhile, the key risky event of this week for the pair remains Sunday’s first round of the French presidential election, that will determine pair’s further course. Seems that the market has already started to price in E.Macron’s win, who represents social liberal political party in France, thereby supporting the common currency. However, the gap between leader of this race (E.Macron) and his nearest opponent (M.Le Pen) remains very tight, so any headlines regarding further developments surrounding French presidential elections will be closely watched for any impact on the pair.
Today the GBP/USD pair continues to expand its decline from half year highs, posted at 1.2905 after surprising UK PM T.May announcement on Tuesday to call for a snap election. Yesterday the pair tried to correct some positions, but failed, breaking below the level of 1.27, amid renewed demand for the USD, following US Treasury Secretary S.Mnuchin's optimistic comments regarding upcoming tax reforms. On the other hand, improved risk-on tone, backed by slight recovery in commodities, and renewed hopes of a “soft Brexit” are limiting pair’s retreat at the end of this week. Today we have quiet eventful trading session, with UK Retail Sales reports in Europe, and bloc of US fundamentals scheduled on NA session.
The NZD/USD pair has eased all its previous session’s gains and became one of the biggest outsiders of Thursday. Yesterday New Zealand published strong CPI report, which finally reached RBNZ’s inflation target level of 2% after five years, thereby providing the pair with strong bullish boost and lifting the major to its multi week highs. However, yesterday’s comments of US Treasury Secretary S.Mnuchin, that highly awaited Trump’s tax reforms are on the way, have reignited demand for the US currency, forcing the NZD/USD to fall back to its weekly lows, located at 0.6983 spot. On the other hand, slightly improved risk-on sentiments allowed the pair to bounce back above its psychological level of 0.70. Now all focus turns toward bloc of US fundamentals, with Existing Home Sales report in a main role, that is scheduled on upcoming NA session.
Today the AUD/USD pair managed to reverse part of its yesterday’s losses amid better risk-on tone across the market. Yesterday the pair received strong bullish momentum in wake of moderate recovery in commodities, however, the rally got out of steam straight away after US Treasury Secretary S.Mnuchin's optimistic remarks on tax reforms, that forced the pair to ease all its previous gains. Now it seems that greenback’s rally has been stalled, allowing the market to take a breather, while slightly higher risk-on sentiments are also supporting the Aussie at the end of the week. Looking ahead, today investors will closely await for US fundamentals, that are scheduled on NA session, while market’s fickle moods regarding risky assets will keep influencing the pair this Friday.
The main events of the day:
UK Retail Sales – 11.30 (GMT +3)
Canadian Core CPI – 15.30 (GMT +3)
US Existing Home Sales – 17.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0662 R. 1.0804
USDJPY S. 108.39 R. 109.95
GBPUSD S. 1.2734 R. 1.2884
USDCHF S. 0.9924 R. 1.0018
AUDUSD S. 0.7467 R. 0.7577
NZDUSD S. 0.6957 R. 0.7077
USDCAD S. 1.3430 R. 1.3518
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