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Thursday, November 23rd
The EUR/USD pair keeps positive mood for the third session in a row in wake of increased selling pressure on the US dollar. Currently the pair is trading in the area of its multiday highs at 1.1840 spot, as investors are still digesting yesterday’s dovish FOMC meeting minutes. Following FOMC meeting results, it became clear that Fed members remain concerned regarding lower inflation growth rates, which raise doubts in the further implementation of aggressive monetary policy of the Fed. Adding to this, a slew of positive German data, featuring preliminary German Manufacturing PMI numbers, also helped the pair to keep its positive tone in early Europe. Now investors await the ECB minutes for fresh momentum, while thin trading conditions will likely to keep the pair in a calm mode, as the US market remains closed due to Thanksgiving Day.
The GBP/USD pair consolidated its positions above the level of 1.33, after a significant bullish rally, triggered by yesterday’s dovish FOMC minutes. Protocols from the last FOMC meeting showed increasing concerns amid Fed members over lower inflation growth rates, which in turn drop a shadow on further Fed aggressive monetary policy path. Adding to this, weaker-than-expected durable goods orders report also added some bearish pressure on the US dollar. On the other hand, the market mainly ignored UK’s Budget, offering little help to the pound, as it failed to provide investors with any surprise. Now all investors’ attention remain focused on the UK crucial GDP numbers, however, sharp market’s reaction seems unlikely amid relatively thin liquidity conditions on the back of the Thanksgiving holiday in the US and Japan.
The AUD/USD pair is following broad market trend, consolidating its positions after refreshing its weekly highs at 0.7624 spot in Asia. Pair’s recent positive mood can be mainly explained by a sharp sell-off of the US dollar in response to dovish FOMC minutes, which showed that weak inflation remains a key concern for the Fed. However, seems that the greenback has stalled its broad retreat, allowing the bulls to take some breather. Moreover, softer sentiments on the commodity market, especially surrounding the copper, also failed to lend any support to the commodity-linked Aussie, eventually leading to the subdued dynamics of the pair. Expected that today the pair won’t show as any sharp moves, as the US and Japanese markets remain closed in observance of Thanksgiving holiday.
The USD/JPY pair remains heavily offered on Thursday, having refreshed its 2-month lows in the vicinity of 111.00 level. The USD/JPY pair was no exception and followed broad market trend, backed by sharp US dollar retreat across the market. The main reason for the decline of the US dollar was Wednesday’s publication of the FOMC meeting minutes, which showed Fed member’s cautiousness over inflation growth pace. However, the pair managed to stall its retreat and to consolidate positions near its recent lows amid thin liquidity conditions, as Japan is celebrating Labour Thanksgiving Day. Looking ahead, in absence of any market-moving events and prevailing low trading volumes in wake of Thanksgiving Day holiday in the US, the pair most likely will extend its consolidative pattern during this trading session.
The main events of the day:
United States - Thanksgiving Day
Japan - Labour Thanksgiving Day
Prelim. UK GDP – 11.30 (GMT +2)
ECB Publishes Account of Monetary Policy Meeting – 14.30 (GMT +2)
Canada Core Retail Sales – 17.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1697 R. 1.1889
USDJPY S. 110.27 R. 112.97
GBPUSD S. 1.3171 R. 1.3405
USDCHF S. 0.9746 R. 0.9950
AUDUSD S. 0.7531 R. 0.7667
NZDUSD S. 0.6792 R. 0.6938
USDCAD S. 1.2632 R. 1.2818
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