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Thursday, June 29th
Seems that the Euro bulls took a breather in mid-Asia after enormous rally, which pushed the EUR/USD pair to refresh its 2017 tops at 1.1419 level. Yesterday the major turned sharply lower and became cheaper nearly for a cent after Bloomberg revealed anonymous ECB source’s comments, which said that the market misinterpreted M.Draghi's remarks on narrowing economic stimulus, delivered at the ECB Symposium on Tuesday. However, the pair managed to regain its positive tone and continued to extend its bullish rally on the back of narrowing monetary policy divergence, as ECB President’s comments were eventually hawkish enough to keep supporting the euro. Adding to that, ongoing broad weakness of the US dollar is also collaborating with pair’s upbeat tone this Thursday. Today after several volatile days we have relatively quiet session with only the US GDP data report, so the market will continue to digest recent economic talks.
The GBP/USD pair was consolidating its yesterday’s gains within 1.2955-70 range, backed by surprisingly hawkish BOE Governor Mark Carney, talking at the European Central Bank Forum. Yesterday Mr.Carney stated that higher inflation is temporary, while noting that the central bank's tolerance for higher inflation is also limited, so partial withdrawal of monetary policy stimulus will be appropriate if economy continues to improve. Also Head of the BoE added that MPC will discuss further rate increase. Meanwhile, the US dollar continues to remain on offers against its major competitors also lending support to the pair in the second half of this week. In the day ahead, the US economy will release its quarterly GDP report, while the UK docket will remain relatively silent, leaving the pair at the mercy of global market sentiments during the European trading hours.
The USD/CAD pair stalled its downside really in Asia, having faced support near its key psychological level of 1.3000. Today the US dollar continues to stay bearish on disappointing macro data, seen yesterday, and pressure from its major competitors, allowing the pair to refresh its 4-month lows at 1.3013 spot. Moreover, oil prices are extending its bullish momentum, lending support to the commodity-linked assets, despite of red numbers of the weekly EIA report, which showed increase in crude oil stockpiles. However, the market ignored yesterday’s speech of the BoC Governor S.Poloz, who sounded mostly neutral, providing no comments on the current state of the economy. Now all eyes remain on the US GDP report, which is scheduled on the NA session, while oil prices and the USD dynamics will continue to determine pair’s next steps during this Thursday.
The AUD/USD pair is following broad market trend and remains positive, having refreshed its 3-month highs at 0.7681 level. The greenback remains well offered across the board helping the pair to build its bullish momentum, despite of the latest remarks of the Fed Chair J.Yellen, who stated that the central bank would continue increase its interest rates gradually. The pair also benefited from positive sentiments on the commodity market, while better risk environment continues to underpin the demand for higher yielding assets, such as the Aussie. Looking ahead, today investors will await for US GDP data, which will be able to bring some impetus to the pair, while global market sentiments will continue to drive the pair throughout this Thursday
The main events of the day:
US GDP – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1253 R. 1.1451
USDJPY S. 111.59 R. 112.77
GBPUSD S. 1.2719 R. 1.3073
USDCHF S. 0.9538 R. 0.9676
AUDUSD S. 0.7551 R. 0.7687
NZDUSD S. 0.7229 R. 0.7351
USDCAD S. 1.2900 R. 1.3268
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