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Friday, June 16th
The EUR/USD pair was consolidating its downside rally within 20 pips range in Asia near its 2-week lows, marked yesterday at 1.1130 level. Seems that hawkish rhetoric of Fed Chair J.Yellen and decision of the US central bank to increase its interest rate by 25 bps are still negatively influencing the pair since it indicates a divergence between policies of the Fed and ECB. Adding to that, positive data from the US economy, published yesterday, were also supportive to the US dollar lately, thereby accelerating pair’s recent decline. However, the pair managed to correct higher this morning, as traders have locked in some profits after crucial events of this week. Now immediate focus shifts toward the Eurozone inflation report, which will be released during European hours, while data from the US housing market will hog the limelight later in the NA session.
Today the dollar/yen pair remained mostly resilient to uneventful BoJ meeting and talks by Japanese CB Governor H.Kuroda. As it was widely expected, the BoJ kept status quo regarding its monetary policy, leaving its interest rate at -0.10%. Moreover, following dovish speech of H.Kuroda, during which he noted that massive stimulation program’s tapering is still unappropriated at the moment, was unable to bring any support to the yen. Adding to that, seems that the market continues to digest hawkish outcome of the FOMC meeting, while risk-on sentiments are gathering pace, as we have passed all important events of this week that is also supporting the pair this Friday. Looking ahead, today only data from the US labor market will be able to bring some directional impetus to the pair, so broad risky sentiments and US dollar’s dynamics will continue to lead the major throughout the European trading session.
The GBP/USD pair is trading near upper bound of its daily range, consolidating its yesterday gains, backed by outcome of another important meeting. Yesterday the pair spiked a one figure higher, having faced resistance at 1.2800, after BoE meeting’s results showed that MPC voted 5-3 to keep its interest rate steady, where 3 of the committee’s members voted to tighten monetary policy. The market took this outcome of the meeting as a hawkish, as voting result has left door opened for further rate increase. Today nothing noteworthy is scheduled in data calendar from the UK, leaving the pair at the mercy of global market’s sentiments, while bloc of data from the US housing market, scheduled on NY trading hours, will be able to provide the pair with short-term directional impetus ahead of market’s close.
The AUD/USD pair regained its positive trend this morning, having broken through the level of 0.7600 amid renewed risk-on sentiments on the market. However, hawkish talks of Fed Chairwoman J.Yellen after Fed rate increase, coupled with positive yesterday’s data from the US economy are still supporting the dollar across the board. Adding to this, mixed sentiments on the commodity market also remain unable to provide any support to the Aussie at the end of this week. Today the market will focus its attention on the data from the US labor market to grab some pips before the weekend.
The main events of the day:
EU CPI – 11.30 (GMT +3)
US Building Permits – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1072 R. 1.1264
USDJPY S. 108.68 R. 112.10
GBPUSD S. 1.2640 R. 1.2852
USDCHF S. 0.9675 R. 0.9809
AUDUSD S. 0.7529 R. 0.7655
NZDUSD S. 0.7137 R. 0.7303
USDCAD S. 1.3183 R. 1.3351
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