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Friday, November 17th
The EUR/USD pair failed to sustain its overnight gains and slipped below the level of 1.1800 on the back some minor attempts of the US dollar to correct positions against its main competitors. However, strong sell-off of the US dollar is still navigating the market, so slight retreat of the pair may appear temporary. Broad weakness of the US dollar is mainly attributed to the latest headlines, saying that special counsel Robert Mueller requested President D.Trump’s campaign documents in terms of ongoing investigation of possible US President’s connection with Russia. As for the tax reform, Republicans in the House of Representatives yesterday approved the tax bill, and now it goes to the Senate for consideration. However, the market barely reacted on this positive news, as it was broadly expected and traders have managed to price in this outcome. Now all eyes remain glued to the ECB President M.Draghi’s speech due later in Europe, while the US housing data will also draw some attention in the NA session.
The GBP/USD pair remains top gainer of this trading session, extending its southward rally above the level of 1.3200. Pair’s upward rally is mostly related to broad US dollar weakness, provoked by renewed US political jitters surrounding Russia’s involvement in D.Trump’s election campaign. Adding to this, yesterday’s stronger-than-expected UK retail sales numbers and hawkish comments of the BoE Governor M.Carney, who sees several rate hikes over the next few years if Britain's economy will keep its growth pace, also contributed to pair’s growth. In absence of any market-moving event from the UK economy, the US dollar dynamics will remain key navigator for the pair, while the US building permits will be able to bring some short-term impetus to the pair during the NA session.
The NZD/USD pair experienced pretty volatile session, however, having returned to the region of its 2-week lows. Earlier, the market reacted aggressively on news, which indicate US President D.Trump’s possible connection with Russia, thereby allowing the pair to correct higher to the 0.6880 area. However, the spike was short-lived and the pair retreated towards its 2-week lows, located in the vicinity of 0.6830, as markets were scared by fresh headlines about new threat from N.Korea, heavily weighing all higher-yielding assets, including the Kiwi. Looking ahead, today we are expecting the US to publish slew of important data from the housing market, while broad weakness of the greenback and risk aversions will continue to influence the pair on the final trading day of the week.
The USD/JPY pair remains under total bearish control, having refreshed its monthly lows at 112.39 spot in Asia. Today broad US dollar weakness is the main underlining theme across the market. The main reason of the US dollar retreat remains ongoing political drama related to possible President Trump’s possible connection with Russia during his election campaign. Adding to this, strong wave of risk aversions also added some negative pressure on the pair this morning on the back of fresh headlines, citing that North Korea is aggressively working on a ballistic missile submarine. In the day ahead, the US economy will publish data from housing market, while the pair will continue to gain sentiments from broadly weakened US dollar.
The main events of the day:
ECB President M.Draghi’s Speech – 10.30 (GMT +2)
US Building Permits – 15.30 (GMT +2)
Canada Core CPI – 15.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1730 R. 1.1818
USDJPY S. 112.44 R. 113.62
GBPUSD S. 1.3105 R. 1.3251
USDCHF S. 0.9855 R. 0.9989
AUDUSD S. 0.7540 R. 0.7632
NZDUSD S. 0.6812 R. 0.6894
USDCAD S. 1.2700 R. 1.2810
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