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Wednesday, May 3rd
The EUR/USD pair came out of its consolidation range in early Europe, and now is losing positions, eyeing to retake its resistance at 1.0900. Pair’s sell-off could be mainly attributed to stalled US dollar’s retreat and its slight correction across the board. On the other hand, further pair’s downside remains unlikely, as investors are gearing up for one of the risky events of this week - FOMC decision, that is scheduled on NA afternoon. It is widely expected that the Regulator will keep status quo on its interest rate, while any remarks from FOMC members on further Fed’s monetary policy tightening will be able to shape up further greenback’s mid-term trajectory. Also traders are cheering up the euro ahead of the final vote of the French presidential election, where centrist Emmanuel Macron continues to stay as a clear favorite. Besides FOMC Statement, today the US economy will also release bloc of fundamental reports, including ADP jobs report and ISM non-manufacturing PMI, that will provide short-term directional impetus during NA session.
Seems that the NZD/USD pair was unable to retain its overnight gains, as US bulls are trying to retake control over the pair. In Asia the pair refreshed its six-day highs, marked at 0.6968 spot, after New Zealand showed excellent results on its labor market. However, by the time of writing the pair has eased most part of its gains, as mild recovery of the greenback has forced the pair to retake its 0.6930-40 range. Moreover, renewed risk aversion ahead of FOMC monetary policy decision is also collaborating with pair’s recent retreat. Looking ahead, today traders will focus on US fundamentals, that are scheduled on NA trading session, while FOMC decision will hog the limelight in NY afternoon.
The Aussie was the worst performer of the Asian trading session, allowing the AUD/USD pair to lose more than 60 pips since its overnight tops, as tumbling commodities are weighing on Australian currency. Seems that yesterday’s weak Chinese Manufacturing PMI is still suppressing the commodity market, especially copper, thereby negatively influencing the AUD/USD pair and sending it to refresh its weekly lows at 0.7486 level. Moreover, slight correction of the buck and renewed risk-off trend, backed by the upcoming Fed Interest Rate Decision, are also adding some bearish pressure on the pair this Wednesday. Next of note for the major remains the US dataflow, featuring ISM Non-Manufacturing PMI and pre-NFP jobs data, that will be reported ahead of the FOMC decision.
The GBP/USD pair came under strong selling pressure this morning, losing more than 50 points since its overnight highs and refreshed its daily lows below the level 1.2900. On Wednesday the pound received strong bearish impetus, following recent EU leaders’ announcement that UK PM Theresa May will be prevented from joining Brexit terms discussion. This statement contradicts with Mrs.May’s intentions to personally negotiate Brexit, about which she talked during her last speech. Now immediate focus shifts toward UK Construction PMI, while US ADP jobs report and ISM services PMI, due to be released later during NA session, will also have significant impact on the spot ahead of the Fed meeting’s outcome.
The main events of the day:
UK Construction PM – 11.30 (GMT +3)
US ADP Nonfarm Employment Change – 15.15 (GMT +3)
US ISM Non-Manufacturing PMI – 17.00 (GMT +3)
US Crude Oil Inventories – 17.30 (GMT +3)
Fed Interest Rate Decision – 21.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0873 R. 1.0961
USDJPY S. 111.49 R. 112.55
GBPUSD S. 1.2838 R. 1.2988
USDCHF S. 0.9879 R. 0.9981
AUDUSD S. 0.7488 R. 0.7580
NZDUSD S. 0.6887 R. 0.6963
USDCAD S. 1.3596 R. 1.3812
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