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Monday, January 8th
The EUR/USD pair extends its Friday’s retreat, having broken through the resistance of 1.2000 at the start of European session. The main driver for the major currency pair remains ongoing bullish correction of the US dollar, despite Friday’s red numbers of the NFP report. However, the revision of the previous NFP results to positive ones provided the dollar with sufficient support to extend its positive correction against its major rivals. Moreover, mixed Eurozone flash inflation data, released on Friday, also exerted some bearish pressure on the pair, thus collaborating with pair’s downside trend at the start of this week. Looking ahead, today in absence of any relevant data releases from both sides, the pair will remain under the influence of the US dollar price dynamics, which will determine pair’s further direction during this trading session.
The GBP/USD pair follows a broad market trend, while keeping its bearish bias at the start of this week. The recent weakness of the pair is mainly attributed to ongoing upside correction of the US dollar across the market, despite mixed data from the US labor market, seen last Friday. Moreover, renewed concerns surrounding Brexit also exert bearish pressure on the pound at the start of this week. This weekend it became known, that the UK PM T.May is going to appoint another Minister of Brexit alongside with D.Davis, who will be responsible for regular updates on preparations for leaving the EU without a trade deal. On the data front, today we are expecting pretty calm session, as both economic calendars won’t offer anything important, so broad market trend and US dollar price actions will remain as key driving factors for the pair this Monday.
The USD/JPY pair shows positive dynamics at the start of this week, extending its rebound from 112.00 level for the fourth day in a row, on the back of ongoing upside correction of the US dollar. The recent demand for the US dollar could be mainly explained by revision of previous NFP numbers to positive, despite lower-than-expected results of the same repot for December. Adding to this, the major also remains better offered, as markets are digesting recent comments of the Japanese PM Sh.Abe, who stressed that re-appointment of the current head of the BoJ for another five-year term is still being discussed. Today we expect that the pair will continue to move in northward direction, following the US dollar price dynamics and upbeat risk-on sentiments, while Japanese markets will remain closed due to Coming of Age Day celebration.
The USD/CAD pair continues its attempts to recover after Friday’s sharp drawdown, caused by employment data from both sides. On Friday, the pair dropped for about 150 pips, following mixed NFP data and green Canada’s employment change numbers, having refreshed its lows in the vicinity of 1.2350 level, which was last seen in late September. Moreover, Friday positive results from the Canada’s labor market caused speculation regarding possible extension of the BoC monetary policy tightening path, which in turn significantly increased demand for the loonie across the market. However, the pair was able to recover some pips and claim above the level of 1.2400 at the start of this week amid ongoing recovery of the US dollar across the market. Looking ahead, today both neighboring economies won’t offer any relevant data reports, leaving the pair at the mercy of broad market trend this Monday.
Major events of the day:
None
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1982 R. 1.2106
USDJPY S. 112.43 R. 113.61
GBPUSD S. 1.3496 R. 1.3614
USDCHF S. 0.9705 R. 0.9801
AUDUSD S. 0.7818 R. 0.7896
NZDUSD S. 0.7124 R. 0.7208
USDCAD S. 1.2267 R. 1.2583
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