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Tuesday, June 20th
The GBP/USD pair was consolidating its yesterday’s decline within 1.2730-40 range throughout the Asia, backed by jitters surrounding Brexit negotiations. As we know, the negotiation process on Brexit officially starter yesterday and according to the latest headlines, some agreements have already been reached. Both sides agreed to create three working groups for negotiations on the rights of citizens, financial settlement and the discussion of other issues. Also sides appointed preliminary dates for subsequent meetings to be held on July 17, September 18 and October 9. By the results of the first meeting, EU and UK remained satisfied with the outcome of the meeting, however, stressing that the final deal is still far away. Looking ahead, uncertainty around Brexit negotiations will continue to weigh on the British pound, as the position of the UK on negotiations is still unclear due to turmoil on the UK political field. Now all eyes remain on BOE Governor Carney’s speech, while the US docket will keep silence during this day, leaving the pair at the mercy of broad market’s trend.
The EUR/USD pair came under selling pressure this morning, losing most part of its overnight recovery, as the common currency is still suffering from the dovish outcome of the ECB meeting, which was held last week. Adding to this, recent hawkish comments from the FOMC member W.Dudley, who noted that the US economy is showing solid results, especially on inflation and the labor market, and has potential to growth even further beyond, has fueled concerns regarding divergence between the ECB and Fed, thereby adding some bearish pressure on the pair. On the other hand, the US dollar corrected slightly lower today, allowing the pair to gain some pips during the Asia. Today we have relatively light data calendar, so investors will closely look for set of Fedspeaks, scheduled in the day ahead, and ongoing Brexit talks, which will be able to shape up pair’s further direction during this trading session.
Seems that the AUD/USD pair remained broadly resilient to RBA Meeting Minutes, which were released during the Asian trading hours. According to the Minutes, the Australian economy is still showing poor results on housing and labor markets, while policymakers expect improved GDP growth in near future. However, the pair has managed to find support from today US dollar’s retreat, recovering most part of its yesterday’s sell-off and posting its daily highs at 0,7623 spot. On the data front, we have another uneventful data session, so US dollar’s price actions will remain as an exclusive driver for the pair during this trading session.
The USD/CAD pair is trading with a mild bearish bias, navigating toward the boundaries of 1.3200 levels this morning. Currently the pair is wobbling in the region of 1.3210, having stepped away from its overnight highs, marked at 1.3228, as oil prices have stalled its ongoing decline, thereby offering support to source-linked assets, such as the Loonie. Moreover, weaker sentiments around the buck and last week’s hawkish remarks of the BoC member C.Wilkins, where she suggested to revise current policy easing measures, are also collaborating with pair’s decline in the first half of this week. Looking ahead, today both neighbor economies will release only secondary data reports, which won’t have any significant impact on the pair, so broad market’s sentiments will continue to determine pair’s further directional course during this session.
The main events of the day:
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1097 R. 1.1237
USDJPY S. 110.39 R. 112.15
GBPUSD S. 1.2665 R. 1.2849
USDCHF S. 0.9673 R. 0.9801
AUDUSD S. 0.7560 R. 0.7648
NZDUSD S. 0.7179 R. 0.7323
USDCAD S. 1.3156 R. 1.3288
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