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Monday, May 29th
The EUR/USD pair extends its consolidation phase, remaining within striking distance of its 5-day lows, marked last Friday. Today the pair continues to trade under negative pressure, as the US dollar remains well bid against its main rivals, following US President D.Trump’s tweets that “huge tax reforms” are coming along with the schedule. Adding to that, traders keep cautious tone ahead of ECB President M.Draghi speech, which is the only risky event for the pair. However, expectedly M.Draghi won’t offer any surprise to the market during his speech, once again reiterating that Eurozone’s economy remains on a steady recovery path, while expressing his concern over inflation’s growing pace. Besides Draghi’s speech, nothing important is scheduled in data calendar, while trading volumes will most likely remain thin, as most of major markets are closed today due to holidays today.
The USD/JPY pair started this week with consolidation of its mild recovery from Friday’s lows, marked in the region of 110.90 level. However, slightly positive risk-off trend, backed by another news of N. Korea's ballistic missile test, provides a minor boost to the Japanese currency. On the other hand, reaction on recent headlines of another ballistic missile test was limited, as markets are getting used to developments on the Korean peninsula. Meanwhile, the US dollar continues to benefit from better-than-expected flash GDP report, witnessed last Friday, and latest comments from the US President D.Trump on the “huge tax reforms”, extending recovery path vs. its main competitors at the beginning of this week. With absolutely empty data calendar for this Monday, the pair will continue to gain traction from USD price dynamics, which will remain as a key driver across the market during this trading session.
The AUD/USD pair is trading on a soft note at the start of a new working week on the back of broadly shrinking risk appetite and positive tone around the greenback, extending its Friday’s decline. Today the US dollar remains on the bids, as markets are digesting latest comments of the US President D.Trump that massive tax reforms/cuts will be implemented in accordance with the schedule. Moreover, mild retracement of commodities, such as oil and copper, is also collaborating with pair’s decline this Monday. Looking ahead, holidays in China, UK and US will keep trading thin today, while US dollar’s price actions will remain as a key driver across the market at the start of this week.
The GBP/USD pair keeps navigating in north direction today, remaining one of the strongest assets of the Asian trading session. The pound extends its recovery at the start of this week after bottoming its monthly lows at 1.2775 post on Friday, following latest election poll results, that showed narrowing lead of May's Conservative party. However, better risk-off tone, triggered by another ballistic missile test by North Korea, is limiting pair’s gains. Nothing noteworthy is scheduled in data calendar for this Monday, so developments on the UK political field will continue to navigate the pair during this trading session.
The main events of the day:
United States - Memorial Day
United Kingdom - Bank Holiday
ECB President M.Draghi’s Speech – 16.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1117 R. 1.1265
USDJPY S. 110.36 R. 112.32
GBPUSD S. 1.2670 R. 1.3012
USDCHF S. 0.9667 R. 0.9797
AUDUSD S. 0.7402 R. 0.7480
NZDUSD S. 0.6978 R. 0.7118
USDCAD S. 1.3393 R. 1.3523
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