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Friday, May 12th
The GBP/USD pair was showing deadly quiet trades in Asia after crucial events of last trading session. Today the pound is consolidating yesterday’s drop to its 5-day lows, marked at 1.2850, in wake of dovish outcome of the BoE meeting. As it was expected the Bank left its interest rate unchanged, however, it also signaled on the absence of an urgent need to raise rates. Additionally, in the accompanying quarterly inflation report the regulator lowered its GDP growth forecast and also revised down its inflation projections. However, the pair managed to bounce off its yesterday’s lows and consolidated its positions in 20-pips range around 1.2980 level, as US bulls took a breather ahead of another portion of fundamental releases from the US economy. Today absence of any macroeconomic data in UK docket will force traders to keep eyes on the block of US fundamentals to determine pair’s next directional move.
Today the EUR/USD pair is oscillating in a lower bound of this week’s trading range in the area of 1.0860/70, having refreshed yesterday its 3-week lows at 1.0834 spot in response to upbeat US economic results. Seems that the market has already started to price in possible Fed’s monetary policy tightening measures, the probability of which recently reached 80%, what in its turn strongly supporting the US dollar across the market. However, currently the pair is extending its consolidative pattern which was observed during the Asian trading session, staying unable to benefit from neutral German CPI and GDP reports. In the data front, today the main risk events will remain the US CPI and retail sales data releases, that could once again boost prospects of a Fed’s hawkish move at the June meeting.
Seems that the USD/CAD is following global markets sentiments, showing lack of momentum at the end of this week. Yesterday the pair refreshed this week highs at 1.3770 in wake of upbeat US economic data, which once again pointed on wellness of the US economy and also hinting on Fed rate hike on its meeting in June. However, the spike was faded quickly, as ongoing recovery of oil prices continues to cheer up sentiments around commodity linked assets, such as the Loonie. Later today, investors will closely watch for US data set, featuring inflation report and monthly retail sales, in order to grab some short-term trading opportunities.
The dollar/yen pair is trading with negative bias in the end of this week, following shrinking risk appetite, which was the main theme of this Asian trading session. Today the pair is extending its bearish run, moving away from the region of its 2-month highs, marked yesterday in 114.40 area, as risk aversion continues to navigate the market in wake of flurry of economic events, scheduled on the end of this week. Moreover, the greenback has failed to build any bullish momentum on Thursday’s upbeat economic releases, also providing no support to the USD/JPY pair in the last trading session of this week. Looking ahead, today the US economy will release another pack of important releases, that will be closely watched for any impetus, while risk-off sentiments will continue to drive the market during European hours.
The main events of the day:
US Core CPI – 15.30 (GMT +3)
US Core Retail Sales – 15.30 (GMT +3)
US Retail Sales – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0809 R. 1.0919
USDJPY S. 112.98 R. 114.80
GBPUSD S. 1.2794 R. 1.2994
USDCHF S. 1.0034 R. 1.0120
AUDUSD S. 0.7316 R. 0.7414
NZDUSD S. 0.6747 R. 0.6991
USDCAD S. 1.3579 R. 1.3829
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