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Thursday, July 6th
The EUR/USD pair regained its positive tone in early Europe, leaping above the level of 1.1350, as the US dollar has stalled its recovery in the second half of this week. Seems that US bulls are losing its upside momentum amid a lack of surprises offered by FOMC minutes, which only indicated softer tone of the US inflation. Moreover, prevailing risk-off market sentiments, backed by recent North Korea ballistic missiles launch, are also somewhat supporting the pair lately. Now all focus shifts toward ECB minutes, as market participants await for any details of potential tapering of the QE program in the next months, which can boost the euro against its main competitors. Besides the upcoming ECB minutes release, investors will also pay attention to US fundamentals, which will also be able to bring some impetus to the pair, while the key risky event of this week remains NFP, which is scheduled on this Friday.
The USD/JPY pair recovered some part of its overnight decline by the European opening amid attempts of the dollar to extend its positive trend against its main competitors. However, further recovery looks fragile, as the pair still remains under pressure of risk-aversion sentiments, which are dominating the market lately. Geopolitical tensions between the US and North Korea are still full of steam that in turn, supports the yen during the last few trading sessions. Adding to this, the US dollar has stalled its recovery mode, as much awaited FOMC Meeting Minutes did little to support the buck, thus, leaving the risk-off trend as an exclusive driver for the pair. Looking ahead, today traders will focus on the bloc of US data, featuring the release of ADP report, trade balance data and ISM non-manufacturing PMI, which will determine pair’s further steps during the NA session.
The GBP/USD pair is trading on a firm note this Thursday, trying to regain the region of 1.2950, amid subdued sentiments around the US dollar. The reaction on yesterday’s FOMC Meeting Minutes appeared mostly muted, as they didn’t provide any surprise to investors, leaving the US dollar without any support against its main competitors. However, further upside of the pair looks unlikely, as the pound has not yet recovered from the triple bearish impact caused by disappointing PMI data. Adding to this, risk-off sentiments, triggered by geopolitical tensions, are still prevailing on the market, also limiting pound’s chances for further recovery. Now investors look forward a to a slew of important US macro data, that is scheduled on the NA session, while the UK docket will remain silent during this Thursday, leaving the pair at the mercy of global market trend throughout the European session.
The AUD/USD pair remained largely unresponsive to outstanding trade figures from Australia, consolidating its positions within 20 pips range near the level of 0.7600, as broad risk-aversion is still gripping the market. Moreover, yesterday's FOMC Meeting Minutes also failed to provide the pair with any directional impetus, as markets didn’t receive any details regarding further Fed monetary policy tightening measures. Today investors will focus their attention on the bloc of US data, which will be able to shape up pair’s further direction later in the day ahead, while global market sentiments will continue to drive the pair during the European session.
The main events of the day:
US ADP Nonfarm Employment Change – 15.15 (GMT +3)
US ISM Non-Manufacturing PMI – 17.00 (GMT +3)
US Crude Oil Inventories – 18.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1288 R. 1.1400
USDJPY S. 112.38 R. 114.12
GBPUSD S. 1.2869 R. 1.2979
USDCHF S. 0.9594 R. 0.9710
AUDUSD S. 0.7542 R. 0.7662
NZDUSD S. 0.7235 R. 0.7323
USDCAD S. 1.2879 R. 1.3053
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