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Wednesday, August 9th
The EUR/USD pair is following global market trend and corrected higher by the European opening after sharp drop, backed by positive data from the US labor market, as strong risk-off sentiments are supporting the Euro somewhat this Wednesday. Seems that the major has recovered a smile on the back of another spike of political tensions between the US and North Korea, triggered by headlines that North Korea's military is examining the operational plan to strike areas around the US territory of Guam with ballistic missiles. The North Korea’s statement was published after US President D.Trump warned NK that if it continues to threaten the US, it would "face fire and fury like the world has never seen." However, USD remains supported by upbeat US JOLTs job openings data, which could cap the renewed upside of the pair. Looking ahead, today the USD price dynamics will remain as a key determinant for the major amid lack of fundamental drivers from both calendars.
The NZD/USD pair remains highly offered in the middle of this week, extending its losing streak for the fourth consecutive session. Currently the pair is staying within striking distance of its 3-week lows, posted earlier in the region of 0.7300, on the back of strong risk aversion, which was dominating the market in Asia. The Kiwi received strong bearish impetus today after China released red inflation numbers that triggered flight to safety. Adding to this, slight weakness of oil prices and softer sentiments on the commodity market are also collaborating with downside traction of the pair this Wednesday. It is expected that strong risk-off moods will continue to navigate the market during European trading session amid empty data calendar from the US and fresh geopolitical tensions, erupted between the US and North Korea. Now all market’s attention remains glued to the next important event for the pair - RBNZ policy decision, which will be announced tomorrow in early Asia.
The dollar/yen pair extends its downside trend for the second session in a row, having refreshed its nearly 2-month lows below its psychological resistance of 110.00 earlier this session. Increased geopolitical tensions between N. Korea and US have significantly improved demand for safe-haven assets, such as the Japanese yen. The market reacted sharply on North Korea’s statement that it is considering plans for a missile strike on the US Pacific territory after US president D.Trump warned N.Korea that any threat to the US would be met with “fire and fury”. However, the pair managed to bounce off its recent lows and regain the level of 110.00 as the greenback is still benefiting from yesterday’s positive results from the US labor market. Today we will have another quiet data session, so the pair will continue to follow broad market risk sentiments throughout this trading session.
The GBP/USD pair corrects higher today after 4-day losing streak, having bounced off its 2-week lows, posted at 1.2953. However, further upside seems unlikely, as strong risk-off sentiments, triggered by geopolitical tensions stemming from the Korean Peninsula, are weighing the pound this Wednesday. Adding to this, seems that US bulls are still benefiting from the US JOLTs jobs report that is also limiting pair’s correction lately. Meanwhile, looming concerns over Brexit negotiations, coupled with expectations of the US CPI report, which is scheduled on this Friday will keep risk-off sentiments in trend. On the data front, today both calendars won’t bring any relevant data, leaving the major at the mercy of global market moods during this trading session.
The main events of the day:
US Crude Oil Inventories – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1653 R. 1.1873
USDJPY S. 109.88 R. 111.04
GBPUSD S. 1.2898 R. 1.3100
USDCHF S. 0.9677 R. 0.9805
AUDUSD S. 0.7858 R. 0.7970
NZDUSD S. 0.7287 R. 0.7389
USDCAD S. 1.2619 R. 1.2729
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