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Monday, September 18th
The EUR/USD pair came out of its consolidation range to the downside at the European opening on the back of attempts of the US dollar to correct higher across the market. However, further downside of the pair looks limited, as cautious sentiments amid investors are gathering pace on the back of upcoming FOMC meeting due later in the week. It is expected that the regulator won’t change its interest rate level, while any comments from Fed members will be highly influential, especially taking into account recent positive US CPI data. Moreover, broad weakness of the US dollar today will continue lend support to the pair in the day ahead. On the data front, the EU CPI data will remain the key data release of the pair, as the US data calendar will keep silence on Monday, leaving the pair at the mercy of broad market trend during this trading session.
Today the GBP/USD pair consolidates its last week gains, staying in the region of its 15-month highs near the level of 1.3600, as investors are still digesting hawkish outcome of the BoE meeting. The pound performed a sharp upside rally last week after BoE indicated sooner rate hike, than it was planned before. Adding to this, during its following Q&A session BoE Governor Mark Carney also noted that possibility of a rate hike has definitely increased, as the UK economy shows positive results lately. Moreover, ongoing weakness of the US dollar, backed by Friday’s red retail sales numbers, limits pair’s chances on downside correction. Today both economic calendars will remain broadly silent, while another speech of the BoE Governor will be able to bring some trading opportunities to investors in the session ahead.
The USD/JPY pair extends its run into positive territory at the start of this week, refreshing its nearly 2-month highs at 111.39 level despite weakness around the US dollar. Shrinking demand for safety remains on the key drivers across the market on Monday, which collaborates with a bid tone around the pair. Moreover, increased divergence between monetary policies of the Fed and BoJ on the back of upcoming meetings of the both regulators and positive US inflation numbers, seen last week, also remains supportive to the pair today. However, further upside of the pair looks fragile, as weaker positions of the US dollar against its main competitors are limiting pair’s gains. Today we have absolutely empty data calendar, so broad market trend will remain as an exclusive driver for the pair throughout this trading session.
Seems that the BTC/USD pair has lost its downside momentum and now is trading on a positive territory, moving closer to the mark of 4000.00, after bottoming the level of 3000 on Friday, which is the lowest level since early August. Recent downside rally of Bitcoin, which started with Chinese ban on ICO’s, was additionally boosted by the decision of Chinese authorities to ban exchange trading of cryptocurrencies. On the other hand, the pair managed to reverse part of its losses and was trading on a positive territory over the weekend, as investors were taking some profits of the table after pair’s huge downside rally. However, uncertainty over Chinese crypto market still persists, which is limiting pair’s immediate recovery. By the moment of writing, the pair was trading at 3939.20, while market cap of Bitcoin was over 63 billion USD, according to coinmarketcap.com.
The main events of the day:
EU CPI – 12.00 (GMT +3)
BoE Governor M.Carney’s speech – 18.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1857 R. 1.2029
USDJPY S. 108.76 R. 112.36
GBPUSD S. 1.3287 R. 1.3765
USDCHF S. 0.9520 R. 0.9684
AUDUSD S. 0.7958 R. 0.8056
NZDUSD S. 0.7168 R. 0.7370
USDCAD S. 1.2074 R. 1.2276
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