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Thursday, May 25th
The EUR/USD pair keeps its positive trend this Thursday, trading within striking distance of its daily highs, marked at 1.1242 spot, on the back of broad USD softness. Heaving taken a short breather in the second half of the Asian session, the pair continued its upside traction towards the level of 1.1250, as the greenback is suffering from cautious tone of FOMC Meeting Minutes, which were released yesterday. The Committee was again unable to provide any details regarding its further actions, stressing that it needs little bit more fundamentals to make sure that recent pullback in the US economy was temporary. Thus, the Fed has put doubts on further aggressive monetary policy tightening measures, lowering probability of two more rate hikes in 2017 from 50% to 46%. Further today only secondary data reports will be released, which will have limited impact, so the pair will continue to follow global market’s trend to determine its further directional move.
The USD/CAD pair continues to trade in bearish trend today, following yesterday’s uneventful BoC Interest Rate Decision and FOMC Meeting Minutes. The BoC left its refi rate unchanged at 0.5% in line with market’s expectations, however, stressing that the current monetary policy fully corresponds to the economic situation. In general, the policy statement sounded quite hawkish, what could be perceived as a hint on further BoC rate hike. As a result, the pair received strong bearish impetus, losing more than a cent from its pre-decision area, located near 1.3530 level. Moreover, further bearish tone of the pair was additionally supported by sluggish FOMC minutes, which failed to lend any support to the greenback against its main peers. And finally, today oil prices staged a solid comeback from its yesterday’s lows, also contributing to further decline of the pair. Looking ahead, today we have quiet empty data session, so the pair will continue to trade under influence of the global market’s trend during this trading session.
In the second half of the week, the pound feels more confident and the GBP/USD pair is currently eyeing to retake its psychological level of 1.3000. The pair is growing for the second consecutive session amid ongoing sell-off in the US dollar, having recovered from its last session’s lows, marked in the region of 1.2920. Yesterday the greenback once again came under selling pressure after release of FOMC minutes, which failed to provide anything new and hence disappointed markets. Moreover, ongoing positive trend in oil prices is cheering up risk appetite, thereby supporting higher-yielding GBP today. Now focus shifts toward preliminary UK GDP data, which is the only important event of this day, therefore, further pair’s price actions will be determined by broad market’s sentiments.
Today the dollar/yen pair is trading on a firm note, recovering its losses after significant drop, witnessed during the last NA session. Yesterday the pair once again dropped below level 112.00 on the back of disappointing FOMC minutes, as it failed to provide any details regarding further Fed’s monetary policy tightening measures and hence sending the US dollar lower across the board. However, the pair gained some bullish traction during Asian session on Thursday and recovered part of yesterday’s losses, as risk-on sentiments weighed on Japanese Yen's safe-haven status, therefore providing support to the pair. Nothing noteworthy is scheduled in data calendar for this Thursday, so USD price dynamics and prevalent risk trend will remain as key determinants for the pair during this trading session.
The main events of the day:
UK GDP – 11.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1151 R. 1.1253
USDJPY S. 111.03 R. 112.35
GBPUSD S. 1.2894 R. 1.3040
USDCHF S. 0.9697 R. 0.9793
AUDUSD S. 0.7419 R. 0.7549
NZDUSD S. 0.6961 R. 0.7101
USDCAD S. 1.3316 R. 1.3584
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