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Wednesday, September 27th
The EUR/USD pair extends its bearish trip for the third consecutive session, having already lost about 2 cents since this week highs, marked in the region of 1.1940. Broad demand for the US dollar remains the key driving factor across the market on Wednesday, as investors are still digesting yesterday’s more hawkish speech by Fed Chair J.Yellen, during which the head of the regulator reaffirmed market’s expectations regarding implementation of the more aggressive monetary policy. Mrs. Yellen stressed that there are some risks associated with a too gradual increase of the interest rate. Adding to this, the greenback reacted positively to recent news that US President D.Trump to present much-awaited tax reform plans later this session. On the data front, today the EU docket won’t bring anything noteworthy, leaving the pair at the mercy of global market trend and the US dollar price dynamics, while investors will focus their attention on a slew of the US macro releases for fresh near-term trading opportunities.
The NZD/USD pair bounced off its 3-week lows, marked at 0.7168 spot during previous trading session, and now is consolidating its positions in the vicinity of the 0.7200 level, as investors remain in anticipation of the key event of this Wednesday. Today all investors’ eyes will remain glued to the RBNZ meeting, which will be held in the late NA session. It is expected that the regulator will leave its interest rate untouched, while following comments of Bank’s members will have some impact on the pair, especially due to recent Bank’s concerns regarding higher positions of the Kiwi. However, the pair will continue to remain under bearish pressure throughout this trading session, as investors are still digesting balanced Fed Chair J.Yellen’s speech, which slightly improved demand for the US dollar. Besides crucial RBNZ meeting, today investors will also pay attention to the bloc of the US releases, which will also be able to bring some trading opportunities later in the session.
The AUD/USD pair remains the biggest loser of this Asian trading session amid highly unfavorable environment for the Aussie across the market. Currently the pair is extending its downside march, having refreshed its 8-week lows at 0.7856 earlier this session, as risk-off moods, sparked by escalation of US-N.Korea conflict, are negatively influencing higher-yielding assets. Weaker sentiments on the commodity market, especially among metals, are another factor that is pressuring on the commodity-linked Aussie. Adding to this, positive tone of the greenback across the market at the equator of this trading week, backed by reinforced expectations for the one more Fed rate hike this year following yesterday Fed Chair Janet Yellen's comments, is also limiting pair’s chances for the immediate recovery. Looking ahead, today the US economic calendar will bring us another pack of fundamental releases, which will be able to set up pair’s next trajectory in the NA session, but until then broad market trend will remain as an exclusive driver for the major.
The GBP/USD pair continues to lose ground on Wednesday, having fallen below its support level of 1.34, amid improved demand for the US dollar across the market. Currently the pair is experiencing intense selling pressure, as markets are digesting yesterday’s mildly hawkish speech by Fed Chair J.Yellen, which bolstered Dec Fed rate hike bets. Moreover, risk-off moods amid persisting political tensions around Korean Peninsula and lack of clarity around the Brexit process are also forcing the pound to lose points against its US counterpart. Looking ahead, the UK data calendar will continue to keep silence today, as it was customary this week, while the US will release durable goods and pending home sales data, which will be able to bring some directional impetus for the pair during the NA session.
The main events of the day:
US Core Durable Goods Orders – 15.30 (GMT +3)
US Pending Home Sales – 17.00 (GMT +3)
US Crude Oil Inventories – 17.30 (GMT +3)
BoC Governor S.Poloz Speech – 18.45 (GMT +3)
RBNZ Interest Rate Decision – 23.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1698 R. 1.1908
USDJPY S. 111.08 R. 113.04
GBPUSD S. 1.3355 R. 1.3565
USDCHF S. 0.9614 R. 0.9762
AUDUSD S. 0.7809 R. 0.7987
NZDUSD S. 0.7106 R. 0.7326
USDCAD S. 1.2279 R. 1.2445
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