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Friday, July 14th
The EUR/USD pair remains largely flat-lined near the level of 1.14 on the final day of this week, barely benefiting from shrinking expectations of Fed aggressive tightening policy. Seems that EUR bulls also lack of any momentum today, as recent dovish comments of ECB member I.Rimsevics, talking about weaker inflation and necessity to run the QE program, are weighing the pair somewhat this Friday. On the other hand, shrinking risk appetite ahead of US fundamentals is lending some support to the euro, forcing the pair to step away from its overnights lows. Now all eyes remain glued to the US economic inflation data, which will bring some hints regarding further divergence between Fed and ECB political courses, thereby shaping up pair’s short-term trajectory. Besides inflation prints, the US will also release retail sales data, while Eurozone trade balance will keep investors busy during European trading hours.
The GBP/USD pair is navigating to the north so far this session, as the US dollar remains broadly subdued on mixed remarks of Fed Chair J.Yellen. The greenback continues to stay under pressure of recent uninformative talks of the Fed head policymaker, who stated that the regulator would enter wait-and-see mode before adjusting its monetary policy. However, talks of Mrs. J.Yellen did not close the door for another rate increase in upcoming months what makes possible for the dollar to correct its position in near-term projection. On the other side, seems that the market has passed over recent concerns over the Brexit deal, as the UK Government finally conceded that it will have to pay EU exit bill. Looking ahead, today the UK docked once again will leave the pair at the mercy of global market trend during European trades, while the bloc of important US data will take center stage in the NA session, as it will be able to shape up pair’s further direction in short-term projection.
The dollar/yen pair is retreating from its overnight highs, marked at 113.58, despite better risk tone, seen during Asia. General market moods regarding recent Fed Chair J.Yellen’s testimony remains broadly disappointed, as head of the US regulator failed to provide any information regarding further Fed monetary policy steps, while noting that further rate increase would be appropriate if inflation shows better growth results. The market considered this comments as dovish, dumping expectations of another rate hike by the end of this year that in turn weighed the greenback across the board. In the day ahead, it is expected that the pair will extend its bearish bias during European trading session, as investors turn cautious ahead of the US CPI report, which will be especially important in light of recent Mrs. J.Yellen’s remarks.
The AUD/USD pair extends its bullish rally, refreshing today this year highs at 0.7759 spot on the back of positive risk-on tone. Easing concerns of an economic slowdown in China are positively influencing the risk-on environment and as a result boosting demand for the Aussie. Adding to this, better tone on the commodity market and broad weakness of the US dollar are also collaborating with pair’s recent bullish run. However, further upside of the pair looks fragile on the back of shrinking risk appetite, as the market turns cautious ahead of this Friday’s major data reports. Today the US economy will release a slew of important macroeconomic reports, featuring the US inflation and retail sales, which will hog the limelight in the NA session.
The main events of the day:
US Core CPI – 15.30 (GMT +3)
US Core Retail Sales – 15.30 (GMT +3)
US Retail Sales – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1322 R. 1.1492
USDJPY S. 112.56 R. 113.88
GBPUSD S. 1.2842 R. 1.3002
USDCHF S. 0.9586 R. 0.9728
AUDUSD S. 0.7647 R. 0.7779
NZDUSD S. 0.7189 R. 0.7433
USDCAD S. 1.2688 R. 1.2788
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