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Friday, July 21st
The EUR/USD pair broke out of its brief consolidation phase, having refreshed its nearly 2-year highs at 1.1677 in Asia, as investors continue to digest recent talks of ECB President M.Draghi. Yesterday the pair performed aggressive bullish rally, despite neutral tone of Mr.Draghi during ECB press conference, talking about weaker inflation and possible extension of the QE program. However, Chief of the ECB confirmed readiness of the regulator to tackle the issue of the QE program in September. In addition, traders took positively Mr.Draghi’s comments on confident recovery of Eurozone’s economy, noting that recent weakness in inflation considered by the ECB as temporary. Meanwhile, the dollar has its own problems amid a new wave of scandals around possible US president D.Trump business deals with Russia. Later today, in absence of fresh fundamentals from both sides the pair will continue tracing US dollar’s price actions and global market trend to determine its further development course.
The AUD/USD pair came under intense selling pressure on the last trading day of this week, having refreshed its 4-day lows at 0.7875 level after dovish talks of the RBA member. In Asia Deputy Governor of the RBA G.Debelle delivered dovish comments, citing that recent neutral outcome of the RBA meeting didn’t indicate to upcoming RBA’s policy tightening steps. Also Mr. Debelle stated that current cash rate is appropriate for policy objectives and it shouldn’t necessarily increase along with other rates abroad. However, the pair managed to recover some pips and climb back above the level of 0.7900, as the greenback continues to remain offered today on the back of another wave of US political tensions. Today nothing much is scheduled in the economic calendar for this Friday, so the pair will continue to follow global market trend, while dovish comments of the RBA member will continue to influence the Aussie for a while.
The NZD/USD pair continues to navigate in the north direction for the fourth consecutive session, refreshing its 10-month highs at 0.7434 level in response to hawkish remarks of New Zealand’s Finance Minister S.Joyce. During the Asian trading session the pair broke out of its consolidation phase to the upside, despite prevailing risk-off sentiments, as NZ FinMin S.Joyce lent strong support on the Kiwi, saying that current level of the NZD reflects a strong economy. Adding to this, broad weakness of the US currency and positive data from the NZ economy are also collaborating with pair’s bullish run on Friday. Looking ahead, today we will have relatively quiet data session, so broad market trend, driven by softness of the greenback, will remain as a key determinant for the pair throughout this trading session.
The GBP/USD pair is trading on a firm note at the end of this week, remaining within striking distance of its daily highs, located in the area of 1.30, as the US dollar fails to recover after yesterday’s slump. However, further upside of the pair seems fragile, as uncertainty over the Brexit deal is still weighing the pound somewhat. After yesterday’s meeting of chief negotiators from the UK and EU, issues of EU citizens' rights and the amount of the UK divorce bill continue to remain key topics for discussion. Adding to this, the pair stalled overnight recovery from its weekly lows, marked yesterday at 1.2933, as broad demand for safety is limiting pound’s possible gains. In the day ahead, the pair will continue to navigate, following broad market trend, as both economies will keep silence at the end of this trading week.
The main events of the day:
Canadian Core CPI – 15.30 (GMT +3)
Canadian Core Retail Sales – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1411 R. 1.1767
USDJPY S. 110.99 R. 112.87
GBPUSD S. 1.2879 R. 1.3079
USDCHF S. 0.9415 R. 0.9667
AUDUSD S. 0.7856 R. 0.8038
NZDUSD S. 0.7301 R. 0.7463
USDCAD S. 1.2491 R. 1.2691
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