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Wednesday, April 26th
The EUR/USD pair lost its upside momentum in early Europe and reversed most part of its overnight gains, amid minor attempts of the US dollar to recover its positions. However, seems that the euro is still keeping its optimism, as traders are pricing in E.Macron’s win at the second round of French election on 7th of May. Moreover, ongoing weakness of the US currency, fueled by doubts that the US government will be able to provide any details on tax reform plans today, is also lending additional leg of support to the major currency pair. Besides taxation plan’s announcement, nothing noteworthy is scheduled in data calendar for this Wednesday, so broad market’s sentiments will remain as a key driver for the pair, however, any abrupt moves will be restricted today, as traders are staying cautious ahead of tomorrow’s ECB Interest Rate Decision.
Seems that CAD bears have took a breather, allowing the USD/CAD pair to consolidate its yesterday’s correction from its 14-month highs, posted at 1.3626 mark. On Tuesday the Loonie came under strong selling pressure, after the president of the US D.Trump announced his plans to impose duties on soft lumber imports from Canada. Further, nervousness around the Loonie intensified even more after the US president stated his intentions for a similar tax on the Canadian dairy industry. Meanwhile, ongoing decline in oil prices is also remaining unable to bring any relief to the Canadian dollar. However, pair’s correction could be mainly attributed to prevalent greenback’s softness, which continues from the beginning of this week. Later today, investors will set up their focus on Canadian Core Retail Sales and weekly crude oil inventories data by EIA, that might bring some impact to the Loonie, while D.Trump’s tax reforms plan’s announcement will take center stage during NA session.
The AUD/USD pair extends its losing streak since the beginning of this week in wake of disappointing AUS data. The Aussie came under strong selling pressure this morning, refreshing its weekly lows at 0.7506, after the first quarter Australian inflation report missed market’s expectations. However, despite a slight miss on the CPI figure the pair managed to bounce off its recent lows, attempting to recover part of its overnight losses, as positive risk-on sentiments are still gripping the market, thereby supporting higher-yielding assets, such as the Australian currency. Today amid absence of any fundamental triggers, broad RO-RO trend will remain as a key driver for the pair during this trading session.
Today the USD/JPY pair is trading in north direction, refreshing its two-week highs at 111.43 spot, as prevalent risk-friendly market’s sentiments are still driving the pair. Seems that risk-on rally, triggered by recent French elections, is in its full swing, driving flows away from the yen. However, further pair’s upside appears fragile amid ongoing greenback’s retreat across the board. Meanwhile, now traders are gearing up for the US tax reforms plan’s announcement and BOJ monetary policy decision, that are next crucial events for the pair, so any sharp moves today will be restricted. In the meantime, in absence of any market moving economic releases from the US docket today, the pair will continue to stay influenced by broad risk trend during this trading session.
The main events of the day:
Canadian Core Retail Sales – 15.30 (GMT +3)
US Crude Oil Inventories – 17.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0810 R. 1.1008
USDJPY S. 109.01 R. 112.23
GBPUSD S. 1.2747 R. 1.2889
USDCHF S. 0.9889 R. 0.9991
AUDUSD S. 0.7490 R. 0.7594
NZDUSD S. 0.6894 R. 0.7044
USDCAD S. 1.3431 R. 1.3697
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