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Wednesday, May 31st
The EUR/USD pair recovered a smile in early Europe on the back of broad dollar’s retreat, trying to retake the level of 1.1200. The pair broke out of its brief consolidation pattern, seen throughout Asia, and now is navigating in North direction, as US bulls seem have run out of steam in European morning. However, the pair will continue to stay under pressure this Wednesday, since ongoing Greece default concerns are still weighing the Euro. Looking ahead, today we have busy data session with German unemployment data, flash EU inflation report and US Pending Home Sales, which will set up pair’s further direction during this trading session.
The GBP/USD pair became the main outsider of today's Asian session, having refreshed this week lows at 1.2788 spot, as UK election jitters are navigating the market lately. Yesterday the pair caught fresh wave of offers, as the pound reacted negatively on latest poll results, which showed that the Conservative Party might not gain the necessary majority of seats in the parliament in the upcoming elections on June 8. However, the pair performed attempt to recover its positions in Asia, but failed, as prevalent risk-off moods are negatively influencing higher yielding assets. Today in absence of any important data releases from the UK economic calendar, the pair will continue to stay under influence of developments surrounding the UK elections and USD price dynamics during European trading session, while the US pending homes sales report will be able to bring short-term directional impetus to the pair in NA session.
This morning the NZD/USD pair was consolidating its reverse move in the area of 0.7080-90, having retreated from its overnight highs, as the Kiwi remains under pressure as of late. Today the pair spiked the level of 0.7100 in mid-Asia, following upbeat data from Chinese industrial sector, however, the spike was short-lived, as renewed mild weakness of oil prices and better tone around the greenback forced the pair to shave-off its gains and retreat below the level 0.71. Meanwhile, optimistic remarks from the RBNZ Chief G.Wheeler on the house price inflation are still providing some support to the Kiwi, limiting pair’s further losses. Now investors shift their attention toward the US housing market data release due later in the day, while greenback’s price actions will continue to determine further pair’s course.
The dollar/yen pair has trimmed its earlier gains, retreating below the level of 111, as risk-off trend is still dominating across the market. Seems that the market has passed over recent better-than-expected Chinese Manufacturing PMI, which triggered fresh spike of better risk-on moods, and now is back to its cautious stance, as the upcoming UK general election makes investors nervous. On the other hand, slightly weaker Japanese data, which were released earlier today, are still providing some support to the pair this Wednesday. On the data front, today investors will closely watch for the US data, featuring Pending Home Sales and set of secondary events, for any short-term trading opportunities later during the NA session, while broad market’s risk trend will continue to remain as a key driver for the pair through European trading hours.
The main events of the day:
Prelim. EU CPI – 12.00 (GMT +3)
Canadian GDP – 15.30 (GMT +3)
US Pending Home Sales – 17.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1070 R. 1.1262
USDJPY S. 110.27 R. 111.59
GBPUSD S. 1.2752 R. 1.2940
USDCHF S. 0.9692 R. 0.9834
AUDUSD S. 0.7397 R. 0.7503
NZDUSD S. 0.7011 R. 0.7143
USDCAD S. 1.3412 R. 1.3530
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