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Thursday, June 15th
The EUR/USD pair is consolidating Wednesday’s reversal, however, keeping its positions above the level of 1.1200 throughout the Asian trading session. Yesterday the pair caught wave of fresh bids, as US inflation and retail sales reports missed market’s expectations. However, the pair was not able to hold its positions and lowered to the level of 1.1200, as Fed increased its interest rate by 25 bps. Nevertheless, market’s reaction on rate hike was limited, as investors had already fully priced in Fed tightening measures, while slightly hawkish tone of Janet Yellen provided some support to the dollar. During a press briefing, Fed Chairwoman J.Yellen stated that US economy renewed its growing pace, after slowdown in the first quarter of this year. Also Yellen added that rate increase in upcoming years would be appropriate, however, without providing any details on the timing of further tightening measure implementations. Today we will have another pack of US macro reports, which will be published in NA session, while investors will also keep eyes on the BOE interest decision, as sharp price-actions in EUR/GBP would provide the euro with some correlational impetus during European trading hours.
The GBP/USD pair is trading in a calm mode after yesterday’s volatile session in anticipation of today’s big event. On Wednesday, the pound was able to gain some point against its US competitor, despite weaker data from the UK labor market, after the US published red numbers of inflation and retail sales. However, shortly thereafter, the pair lost its momentum on the back of the outcome of the Fed meeting, where the committee increased its interest rate by 25bps. Today, the meeting of the BoE will take place and it is expected that the regulator will keep status quo regarding its monetary policy. Moreover, today after the meeting the absence of the usual press conference with Governor Carney will also limit further price-actions, as it will leave the market without any details on further BoE monetary policy steps. However, investors will focus today on another event, which will be held at the Mansion House later today, where head of BoE M.Carny and Chancellor of the Exchequer P.Hammond will discuss the future development of the UK policy. Adding to that, today investors will also pay attention to the US data, which will provide the pair with some directional impetus during the NA session.
The NZD/USD pair has lost its upside momentum after yesterday’s disappointing US data and now is navigating toward 0.72 handle. Yesterday the pair received strong bullish momentum, having refreshed its 4-month highs at 0.7319 level, as the US economy disappointed the market with downbeat inflation report. However, the spike was short lived, as shortly after the US data, the Fed increased its inflation rate, thereby forcing the pair to reverse its early gains. Moreover, down slide of the pair was additionally accelerated after the NZ GDP showed a less-than expected growth in the first quarter. Today expectedly the pair will continue to lose points, as moderate risk-off moods and slump in oil prices will keep the pair under bearish pressure. Looking ahead, today the US docket will bring fresh batch of economic releases, featuring Philadelphia Fed Manufacturing Index and several secondary tiered data reports, which will keep investors busy throughout NA trading session.
The USD/CHF stepped away from its daily highs, posted at 0.9734 level, on the back of the results of the SNB meeting. The pair subdued its north directed rally, backed by red numbers of Swiss PPI report, after renewed demand for the Franc, backed by results of the SNB meeting. However, investors payed little of attention to uneventful SNB interest decision and SNB Governor T.Jordan’s rhetoric, thereby limiting any further price actions. So, since the SNB was unable to stir up Swiss bulls, then markets will continue to digest recent events from the US economic field, shaping up further pair’s directional course. Moreover, today investors will also focus their attention on the bloc of US macroeconomic releases, which will provide the pair with additional impetus later in NA session.
The main events of the day:
SNB Press Conference – 11.30 (GMT +3)
UK Retail Sales – 11.30 (GMT +3)
BoE Interest Rate Decision – 14.00 (GMT +3)
Philadelphia Fed Manufacturing Index – 15.30 (GMT +3)
BoE Governor M.Carney’s speech – 23.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1132 R. 1.1338
USDJPY S. 108.01 R. 111.11
GBPUSD S. 1.2670 R. 1.2858
USDCHF S. 0.9599 R. 0.9789
AUDUSD S. 0.7482 R. 0.7688
NZDUSD S. 0.7141 R. 0.7383
USDCAD S. 1.3120 R. 1.3334
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