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Wednesday, December 20th
The EUR/USD pair extends its upside trend for the third session in a row, as ongoing softness of the US dollar remains key driving factor across the market this Wednesday. Recently the greenback received another bearish impetus following latest update on the tax reform bill. The US Senate approved tax legislation, however, sending bill back to House of Representatives for a re-vote, as some documents didn’t match the rules of the Senate. On the data front, today the EU data calendar will remain silent, while the US will publish fresh data from the US housing market, which will help the pair to determine its further movement direction. However, today all eyes will remain glued to fresh developments related to the upcoming US tax reform.
The GBP/USD pair keeps positive tone this Wednesday on the back of subdued dynamics of the US dollar. Seems that US bulls remain on the back foot today as the tax reform bill was sent back to the House for the final vote. On the other hand, ongoing uncertainty around Brexit and renewed risk-off trend, triggered by the latest news, saying that North Korea is going to load bioweapon onto ICBMs, are limiting pair’s further gains. Now all traders’ attention shifts towards BoE Governor M.Carney’s testimony on the November Financial Stability Report before the Treasury Select Committee, which will bring some impetus to the pound, while US existing home sales numbers will also be in focus for fresh trading opportunities.
The NZD/USD pair remains under pressure at the equator of this week despite broad weakness of the US dollar. The NZ dollar came under notable selling pressure at the start of the Asian session following bloc of negative NZ economic results, featuring notable trade deficit. However, the Kiwi’s downside rally appeared limited and the pair met support in the area of 0.6500 level, as markets are digesting recent US political/economic events. The US Senate approved the much-awaited tax legislation, however, sending the bill back to the House for the re-vote. Looking ahead, today investors will focus their attention on fresh data from the US housing market, while NZ GDP numbers will help the pair to form its further trajectory during next Asian trades.
Bears finally met Bitcoin. Today the BTC/USD pair remains depressed, having refreshed its intraday lows below the level of 16,000.00. Recall, earlier this week bitcoin rose in price to 19,850.00 USD on news that another US based currency exchange CME Group launched bitcoin futures. However, there is no clear catalysts for pair’s retreat, so recent weakness of the world’s largest cryptocurrency could be mainly explained by technical correction after sharp upside rally. However, Bitcoin Cash, Bitcoin’s younger brother and one of its main rivals, has gained 60% for the last 24 hours reacting on headlines that Coinbase exchange will start offering trading BCH, eventually adding some negative pressure on the most popular digital currency. By the moment of writing, Bitcoin was trading on the level of 16,151.00, while its market capitalization dropped below the level of 300 billion USD, according to data available on coinmarketcap.com.
Major events of the day:
BoE Governor M.Carney’s Speech – 15.15 (GMT +2)
US Existing Home Sales – 15.00 (GMT +2)
US Crude Oil Inventories – 15.30 (GMT +2)
NZ GDP – 23.45 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1749 R. 1.1893
USDJPY S. 112.25 R. 113.39
GBPUSD S. 1.3299 R. 1.3445
USDCHF S. 0.9809 R. 0.9897
AUDUSD S. 0.7626 R. 0.7700
NZDUSD S. 0.6932 R. 0.7038
USDCAD S. 1.2813 R. 1.2953
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