Daily economic digest from Forex.ee
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Wednesday, June 7th
The EUR/USD pair remains offered so far this session, refreshing its daily lows at 1.1246, as investors are refraining from placing any directional bets ahead of the key political and economic risky events. The UK general election and ECB monetary policy decision are the main events of the week, which will be highly influential for the pair, as the market believes that ECB may appear dovish on its policy stance, while the UK general election will provide more hints on a divorce deal between the UK and EU. Amid absence of any fundamental releases from both economies, the pair will likely keep its cautious tone today, while any sharp moves of the euro cross with the pound could bring some correlational impetus this Wednesday.
The Australian dollar extends its winning streak against the greenback for the fourth session in a row, once again allowing the AUD/USD pair to refresh its monthly highs at 0.7544. The pair met fresh bids this morning after Australia released GDP numbers, which came out above market expectations. Furthermore, ongoing softness of the US dollar and mild recovery of the commodity market allowed the pair to consolidate its overnight gains and keep its range near the level of 0.7540. Nothing much is scheduled in the data calendar for today, so broad market sentiments and upbeat Australian data will continue to determine pair’s further directional course.
The GBP/USD pair is showing lack of momentum, hovering near 1.2900 level so far this session, as investors remain nervous ahead of the key risky event of this week - the UK general election. According to the latest opinion polls, Conservatives are still holding its leading position in this election race, while the gap vs. its nearest opponent is ranging between 1% and 10%. However, seems that the market has started to price in a win of the Conservative party, as it could bring more clarity over Brexit developments, which in turn, will be highly supportive to the pound. Further, both calendars will remain muted throughout this Wednesday, so the pair will continue to stay under influence of the latest headlines from the UK political field.
The USD/JPY lost its upside momentum in early Europe, having faced resistance at 109.63 level, as better risk-on sentiments, backed by upbeat dynamics of oil prices and attempts of the US dollar to recover its positions, have faded away. Seems that concerns over tomorrow’s crucial events are starting to gather pace across the market, thereby increasing demand for safe-haven assets, such as the Japanese currency. Moreover, seems that the US dollar continues to suffer from weak results of the US economy, providing additional pressure for the pair lately. Looking ahead, today we have absolutely empty data calendar, so broader market risk sentiments will remain as an exclusive driver for the pair this Wednesday, while Japanese GDP numbers will be able to bring some impetus to the pair during the next Asian session.
The main events of the day:
US Crude Oil Inventories – 17.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1223 R. 1.1311
USDJPY S. 108.42 R. 111.00
GBPUSD S. 1.2831 R. 1.2987
USDCHF S. 0.9588 R. 0.9668
AUDUSD S. 0.7430 R. 0.7560
NZDUSD S. 0.7093 R. 0.7249
USDCAD S. 1.3408 R. 1.3508
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