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Monday, August 21st
Today the EUR/USD pair stepped below the level of 1.1750, despite strong risk-off trend, which was dominating the market in Asia. Seems that renewed demand for the US dollar remains the key determinant for the pair at the start of this week amid lack of any fundamental drivers. Moreover, last week’s ECB minutes, which showed worries of the regulator regarding higher exchange rate of the common currency, are still weighing the pair on Monday. However, shrinking risk appetite, backed by reappeared concerns over the conflict between the US and N.Korea, may provide some support to the euro, thus limiting pair’s further losses. Today nothing important is scheduled in data calendar, so the pair will continue to trace global market sentiments, while investors are slowly shifting their attention to the main event of this week - Jackson Hole Symposium, which will begin this Thursday.
The USD/JPY pair navigates on south at the start of this trading week, as boosted flight to safety remains the key determinant for the pair. The new wave of risk aversions approached the market this Monday, as N.Korea threatened the US to unleash a "merciless strike" on the back of upcoming joint US-South Korea military drills. Pyongyang named this exercises "reckless behaviour driving the situation into the uncontrollable phase of a nuclear war", thereby boosting tensions between the US and Korean Peninsula. However, positive sentiments, surrounding the US dollar at the start of this week, may limit pair’s further loses. Looking ahead, the US calendar won’t bring anything relevant today, so broad risk aversion will continue to navigate the market throughout this Monday.
The GBP/USD pair was capped within a flat corridor this morning, consolidating its rebound from 5-week lows near the level of 1.2870. However, further upside looks unlikely, as renewed risk-off trend, fuelled by ongoing geopolitical drama between the US and North Korea is pressuring on the pound at the start of this week. Adding to this, recent recovery of the greenback also negatively affects the pair on Monday. In the day ahead, we will have absolutely empty data calendar, so broad market trend will remain as an exclusive driver for the pair throughout this trading session.
The AUD/USD pair trades with a bearish bias on Monday, remaining under pressure of several factors. Seems that the US dollar has managed to regain its bullish trend, forcing the pair to lose points at the start of this week. Moreover, strong risk aversions, backed by geopolitical tensions between the US and North Korea, are negatively affecting demand for higher-yielding assets, such as the Aussie. Today the pair will continue to track broad market sentiments and US dollar price-actions for further momentum, as the US data calendar will remain silent during this trading session.
The main events of the day:
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1679 R. 1.1813
USDJPY S. 108.14 R. 110.12
GBPUSD S. 1.2787 R. 1.2959
USDCHF S. 0.9551 R. 0.9717
AUDUSD S. 0.7838 R. 0.7988
NZDUSD S. 0.7247 R. 0.7367
USDCAD S. 1.2475 R. 1.2743
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