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Thursday, June 22nd
The EUR/USD pair is trading with a bullish bias this Thursday, keeping its positions in the region of 1.1170, as the US dollar has not been in demand lately. However, seems that the pair lost its upside in early Europe amid minor attempts of the buck to recover part of its losses. Even so, pair’s weakness expectedly will not last long, as ongoing sell-off of the oil has ignited some worries of the US inflation slowdown, which in turn will continue to keep bearish tone around the US dollar. Later today, there is very little on the cards in terms of fundamentals from the economic calendar, so the pair will continue to track the USD dynamics, while sharp moves in the EUR/GBP cross, especially in view of today’s EU summit, will also be able to bring some directional impetus to the pair in the day ahead.
Today the pound is trading on a firmer note, still being supported by yesterday’s hawkish speech of the BoE member A.Haldane, which helped the GBP/USD pair to recover from 1.2589 to 1.2709. On Wednesday, the BoE Chief Economist Andy Haldane managed to offer so much-needed relief for the pound, re-emerging hopes of a possible rate increase. However, the UK political drama is still remaining in the limelight, significantly weighing the pound across the board and limiting any further recovery of the pair. However, there is still some good news for the pound to note about. Yesterday the Democratic Unionist Party lawmaker Jeffrey Donaldson stated that talks between UK PM T.May and his party are making progress, which may lead to some stability on the UK political field. Today all eyes will be focused on Theresa May’s speech on post-Brexit Citizens' right plan, which will be revealed on EU leaders’ summit in Brussels.
The NZD/USD pair is remaining positive after sharp spike, backed by RBNZ announcement. The market reacted positively on RBNZ decision to keep its rate unchanged at the level of 1.75%, sending the pair to refresh its 3-day tops at 0.7277 level. However, the pair eased part of its early gains and returned to the region of 0.7250, as the Bank provided no surprises to the market, leaving its policy stance natural and noting that the monetary policy will remain accommodative for a considerable period. Nevertheless, today the pair will continue to keep its positive trend, as weakness of the US dollar is supporting the pair this Thursday. On the other hand, ongoing decline of oil prices, which recently refreshed its yearly lows, may limit pair’s further gains. On the data front, we have another relatively quiet data session, so US dollar’s price dynamics and broad market’s sentiments will remain as key determinants for the pair during this Thursday.
The dollar/yen pair extends its south-directed rally for the third session in a row, moving away from its monthly lows, marked at 111.79 on Tuesday. Yesterday the pair failed to keep its recovery mode, despite positive data from the US housing market and lost its position, navigating toward the region of the 111.00, as ongoing sell-off of the oil has risen risks of slower inflation growth, which in turn may delay Fed rate increase this year. Adding to this, continuous cautious stance of the market, backed by the UK political turmoil, also collaborates with offered tone surrounding the major. Nothing much is scheduled in data calendar for this Thursday, so the pair will continue to trace broad market’s moods to determine its further directional course.
The main events of the day:
Canadian Core Retail Sales – 17.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1113 R. 1.1195
USDJPY S. 110.71 R. 112.07
GBPUSD S. 1.2536 R. 1.2776
USDCHF S. 0.9701 R. 0.9763
AUDUSD S. 0.7518 R. 0.7602
NZDUSD S. 0.7180 R. 0.7266
USDCAD S. 1.3226 R. 1.3398
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