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Monday, July 17th
After having faced resistance in the region of 1.1475, the EUR/USD pair came under renewed selling pressure, following broad market trend. The main currency pair also remains under pressure today on the back of thin trades, as Japanese market is closed today due to Ocean Day celebrations, while the US dollar attempts to correct higher after the disappointing CPI report, which lowered probability that the Fed will increase its interest rate in upcoming months. Now immediate focus shifts towards the Eurozone CPI report, which will bring fresh impetus in European trading hours, while the US docket will remain broadly silent at the start of this week, leaving the pair at the mercy of global market trend, which will navigate the pair throughout NA trading session.
The GBP/USD pair is following broad market trend at the start of this week and is retreating from its 10-month highs, posted at 1.3114 spot last Friday, as the greenback has stalled decline against its main competitors. On Friday, the buck came under strong selling pressure after highly influential US CPI figures missed markets expectation, downgrading chances that the Fed will increase its interest rate by the end of this year. Moreover, further gains of the pair also look unlikely, as investors turn cautious ahead of Tuesday’s UK CPI data, which could hint on further Bank’s rate actions, especially in light of recent hawkish talks of BoE MPC members. Today data calendars from both the US and UK will remain broadly silent, hence global market trend and US dollar dynamics will guide the pair throughout this trading session.
The AUD/USD pair has eased some part of its Friday’s gains, as investors perform profit taking actions after the pair refreshed its 15-month at 0.7834 level. Seems that AUD bulls remained unimpressed by upbeat Chinese macro data, providing no support to the pair at start of this week. Meanwhile, the US dollar extends correction against its main competitors, forcing the pair to retreat from its multimonth tops, as investors lock in some profits, especially after pair's strong upside rally of over than 250 pips in previous six trading sessions. On the data front, nothing relevant is scheduled in data calendar for the pair, so sentiments around the greenback will remain as an exclusive driver for the pair for this Monday.
The NZD/USD pair has stalled its downside trend from the region of multimonth tops, as the pair caught some fresh support from better-than-expected Chinese data releases. Pair’s retreat can be largely attributed to the US dollar correction and profit taking actions after pair’s significant rally, backed by week Friday’s US CPI data. It is expected that the pair will continue to show subdued trades, as investors are refraining of placing any important directional bets ahead of New Zealand’s CPI report, which will be released during next Asia. Meanwhile, the US economic calendar remains absolutely empty at the first working day of this week, so buying interest around the US dollar will continue to navigate the pair throughout this trading session.
The main events of the day:
Japan - Ocean Day
EU CPI – 12.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1363 R. 1.1523
USDJPY S. 111.46 R. 114.10
GBPUSD S. 1.2870 R. 1.3228
USDCHF S. 0.9583 R. 0.9725
AUDUSD S. 0.7685 R. 0.7903
NZDUSD S. 0.7270 R. 0.7402
USDCAD S. 1.2576 R. 1.2782
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