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Wednesday, May 17th
Having faced resistance in the area of 1.1120 level, the EUR/USD pair pulled back slightly, as bulls seems to be exhausted after 4-day northern rally. Today the pair refreshed its half-year tops at 1.1122 spot, which is the highest level since the US Presidential election, as ongoing sell-off of the greenback continues to navigate the market as of late. Moreover, recently the US currency came under renewed selling pressure after it became known, that US President D.Trump disclosed secret information to Russian diplomats, thereby providing additional support to the pair. On the data front, today the Eurozone will publish final CPI figures for the last month, while the US docket will release only secondary data reports, so the pair will keep following global market’s sentiments during the NA trading session to determine its further direction.
The dollar/yen pair remains under intense selling pressure this Wednesday, refreshing its 8-day lows at 112.35 spot, as renewed wave of risk-off sentiments approached the market. Today bearish sentiments surrounding the pair were mostly intensified by political warries, following recent headlines that D.Trump shared classified information with Russian officials at a meeting last week. As a result, risk aversion returned to the markets, which in its turn increased demand for safe-haven assets, including Japanese currency. Adding to that, seems that US dollar continues to suffer from decreased prospects of Fed rate hike in June meeting, following set of lackluster US macro reports, that is also collaborating with pair’s decline. Today nothing noteworthy is scheduled in both economic calendars, so global market’s sentiments, driven by persistent weakness of the US dollar, and broad RO-RO trend will continue to determine pair’s further development course.
Today the GBP/USD pair once again dropped to the region of 1.2900 after brief correction from its last session’s lows. Yesterday the pair failed keep its positions and dipped below the level of 1.2900, despite better-than-expected UK inflation figures. However, the pound managed to recover part of its losses during Asian trading hours amid ongoing US dollar’s softness, while taking some pressure from broad risk aversion sentiments, triggered by fresh concerns over the US political scenario. However, the upside lost momentum in early Europe, as US bears took a breather, sending the pair toward the region of 1.2900. Now traders are awaiting for data set from the UK labor market, while the US economic calendar will remain silent during this Wednesday, leaving the pair at the mercy of global market’s sentiments in NA session.
The CAD/USD pair reversed most part of its overnight losses, retaking the level of 1.3600 this morning. The pair apparently lost its overnights downside momentum and returned above the level of 1.3600, as the greenback stalled its retreat against its main competitors in early Europe. Adding to this, a mild pullback in oil prices, triggered by Tuesday’s API red numbers, that showed increase in oil inventories, is also collaborating with pair’s recent recovery. Looking ahead, today both economies will publish only secondary data reports, so Crude Oil Inventories by the EIA will hog the limelight in NA session.
The main events of the day:
UK Average Earnings Index +Bonus – 11.30 (GMT +3)
UK Claimant Count Change – 11.30 (GMT +3)
EU CPI – 12.00 (GMT +3)
US Crude Oil Inventories – 17.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0925 R. 1.1175
USDJPY S. 112.41 R. 114.13
GBPUSD S. 1.2821 R. 1.3005
USDCHF S. 0.9772 R. 1.0008
AUDUSD S. 0.7377 R. 0.7461
NZDUSD S. 0.6840 R. 0.6928
USDCAD S. 1.3528 R. 1.3696
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