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Thursday, August 10th
The EUR/USD pair has lost its bid tone and currently is navigating to the south, extending its retreat below the level of 1.1750, as the US dollar is recovering ground across the market. Adding to this seems that the spike of geopolitical tensions between the US and North Korea has faded away, providing no support to the common currency this Thursday. However, it is expected that the pair won’t show any sharp moves in the day ahead, as investors are awaiting for the main event of this week – Friday’s US inflation prints, bringing some cautiousness across the market, as better-than-expected results will be able to hint on further US monetary policy tightening measures. On the data front, the EU calendar will remain silent today, leaving the pair at the mercy of the USD dynamics until the releases of the US PPI and jobless claims data, which will be released in the NA session.
The NZD/USD pair remains the main mover of this Thursday, having refreshed its monthly lows at 0.7262 spot, following recent major event. Earlier this session the RBNZ left its interest rate unchanged at the level of 1.75% and also released accompanying neutral monetary policy statement, which reiterated that the monetary policy of the Bank will remain accommodative for a considerable period, that was perceived by the market as positive outcome of Bank’s meeting, thus underpinning bid tone around the pair. However, following dovish talks of RBNZ Governor G.Wheeler regarding weaker inflation and stronger NZ dollar forced the pair to change its direction and to refresh its morning lows. Adding to this, recent uptick in the US dollar demand also added some bearish impetus to the pair this Thursday. As RBNZ decision has passed over, investors have shifted their attention to the bloc of the US economic data, featuring PPI print and weekly jobless claims, which will be able to bring fresh impetus to the pair during the NA session.
The USD/JPY pair has recovered its positive tone, posting minor gains this morning, after yesterday’s pullback to its 2-month lows. Seems that stability is returning to the market, setting risk appetite back to normal, after yesterday’s turbulence, backed by fresh spike of geopolitical tensions between the US and North Korea, thus leaving safe-haven assets with no support. Adding to this, the bloc of mixed Japanese data also added some bullish pressure to the pair during the Asian session. However, it is expected that slight cautiousness might appear later in the day, which will limit pair’s recovery, as the market is awaiting for Friday’s crucial data from the US economy. Later in the NA session, the US economy will release set of macroeconomic data, including PPI and several second tier reports, which will hog the limelight during New York trading hours.
The GBP/USD pair has recovered its offered tone this Thursday, having refreshed its daily lows in the region of 1.2970. The pound maintains a clear bearish bias and remains near the lower border of the recent range after several unsuccessful attempts to recover, as looming concerns over Brexit negotiations are still pressuring on the UK currency. On the other hand, the dollar is showing moderate recovery against its main competitors that additionally weights the pair today. Meanwhile, the market keeps cautious stance this morning ahead of crucial data from the UK economy, featuring Manufacturing Production and Trade Balance figures, which will be able to set up next leg for directional move of the pair, forcing investors to refrain of opening any important directional bets. Besides the UK data, the US docket will also provide important macroeconomic reports, keeping investors busy during NA session.
The main events of the day:
UK Manufacturing Production – 11.30 (GMT +3)
US PPI – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1662 R. 1.1810
USDJPY S. 109.18 R. 110.78
GBPUSD S. 1.2938 R. 1.3058
USDCHF S. 0.9530 R. 0.9796
AUDUSD S. 0.7826 R. 0.7944
NZDUSD S. 0.7295 R. 0.7365
USDCAD S. 1.2630 R. 1.2754
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