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Tuesday, June 6th
The EUR/USD pair dipped into the region of 1.1240-50 in the European opening, as the US dollar is attempting to correct higher after significant downside rally against its main competitors. However, further losses of the pair remain capped amid growing cautiousness, backed by upcoming ECB interest rate decision and ongoing uncertainty on the political field of the UK ahead of general election, which are both scheduled on this Thursday. Moreover, the US dollar remains under pressure of recent downbeat data that also makes further downslide unlikely. Looking ahead, today we have relatively quiet data session with only US JOLT’s Job Openings report, scheduled on NA trading session, so US dollar’s dynamics will remain as a key determinant throughout this Tuesday.
The AUD/USD pair continues to keep its bullish bias, triggered by the disappointing US jobs report on Friday, having mostly ignored RBA interest rate decision and keeping its range in 0.7485-90 region. As it was broadly expected, the RBA maintained status quo on its policy stance and left its key interest rate at level of 1.5%. However, in its decision-accompanying statement, the RBA reiterated its worries regarding Chinese debt, which can bring significant impact on the Australian monetary policy in medium term projection, while stating that housing market’s heat is starting to cool off, thereby lending some support to the Aussie. So, as the RBA interest rate decision has passed over, leaving the pair with no clear direction, the market turns its attention toward JOLT’s Job Openings report, which is the only relevant data release for today.
The pound started a new week on a firm note, allowing the GBP/USD pair to break above the level of 1.2900 and to post its 8-day highs at 1.2950 level. Seems that the pound remains mostly resilient to the diversity of results in different opinion polls regarding a gap between Conservatives and Labour party. However, most of them are forecasting win of the Conservative party in the UK election race, which overall provides the pound with support across the market. Moreover, the greenback extends its broad retreat, led by awful NFP data, also collaborating to pair’s upside in the first half of this week. Looking ahead, nothing noteworthy is scheduled in the UK docket, leaving the pair at the mercy of global market’s sentiments and the US dollar’s price dynamics, while only the US JOLT’s Job Openings report will be able to set up pair’s further directional course.
The Kiwi remains one of the best performers of this Asia, making possible for the NZD/USD pair to refresh its 3-month tops at 0.7174 spot. Seems that the Kiwi remained mostly unperturbed by ongoing weakness of oil prices and broadly downbeat sentiments on the commodity market, as the NZD/USD pair finds support from major sell-off in the US dollar. As the market has fully priced in upcoming Fed rate hike on its June meeting, the greenback remains highly vulnerable to negative results of the US economy, such as disappointing Friday’s NFP and weaker-than-expected US ISM Non-Manufacturing PMI, which in turn, provides significant boost to the pair lately. Nothing much is scheduled in event calendar of this Tuesday, as only another jobs report from the US labor market will be able to bring some impetus to the pair, so broad US dollar’s price dynamics will continue to determine pair’s further traction.
The main events of the day:
US JOLT’s Job Openings – 17.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1208 R. 1.1304
USDJPY S. 110.08 R. 110.92
GBPUSD S. 1.2809 R. 1.2987
USDCHF S. 0.9602 R. 0.9688
AUDUSD S. 0.7393 R. 0.7545
NZDUSD S. 0.7097 R. 0.7169
USDCAD S. 1.3435 R. 1.3519
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