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Monday, March 19th
The EUR/USD pair follows broad market trend today, caused by the growth of the US dollar against its main competitors. According to investors’ expectations, the Fed is to increase its interest rate by 25 bps this Wednesday, which is the key market-moving theme today, thus forcing the pair to trade with a bearish bias at the start of this week. Moreover, taking into account upcoming events, divergence between the Fed and ECB also comes into play, as latest comments by ECB officials showed that the Bank would continue to maintain accommodative monetary policy, while EZ inflation growth pace continues to show disappointing results. Looking ahead, today the economic calendar won’t offer us anything noteworthy, so widespread market sentiment, caused by upbeat price dynamics of the US dollar, will continue to form pair’s further trajectory.
The GBP/USD pair keeps offered tone this Monday on the back of busy economic week ahead. Currently the pair is trading at 1.3923 level, having retreated from its intraday highs, marked at 1.3949, as cautiousness ahead of both regulators’ interest rate decisions negatively influences higher-yielding pound. Investors are awaiting that both Banks will adhere more hawkish policy tightening strategy this year, as both economies are showing pretty robust results lately. Moreover, tomorrow the UK will publish inflation data, which will additionally hint at how aggressive measures the BoE will apply to its monetary policy this year. However, today the economic calendar won’t bring us anything important, so the pair will continue to follow broad market trend this Monday.
The AUD/USD pair remains heavily offered at the start of this week, having lost more than two cents since last Thursday tops and refreshed its 3-month lows on the level of 0.7687. The main reason of pair’s retreat remains increased demand for the US currency, as investors are pricing in Fed rate hike, which is scheduled for this Wednesday. Adding to this, softer tone on the commodity market, especially around metals, such as gold and copper, also contributes to pair’s retreat. In absence of any important market-moving event from the US side, today the price dynamics of the US dollar will continue to navigate the pair during this trading session, however, investors will remain in anticipation of the RBA minutes, which will be published during the next Asia.
The USD/JPY pair started this week with on a negative note, despite better sentiments around the greenback. Seems that risk-off sentiment is still gripping the market, thus benefitting the yen, as safe-haven asset. Fears of a global trade war, triggered by D.Trump's tariffs on steel and aluminum, which will be implemented on March 23rd , remain one of the key driving factors for the pair today. Moreover, it is expected that broad cautiousness will continue to influence the market in the next couple of days, as traders are awaiting for the Fed interest rate decision, which will take place this Wednesday. According to markets’ expectations, the regulator will increase its interest rate, however, investors will also closely watch for any comments regarding further Fed rate strategy. On the data front, today the US data calendar will remain silent, therefore, the pair will continue to follow broad market sentiment during today trades.
Major events of the day:
Support and resistance levels for the major currency pairs:
EURUSD S. 1.2218 R. 1.2370
USDJPY S. 105.21 R. 106.73
GBPUSD S. 1.3843 R. 1.4029
USDCHF S. 0.9454 R. 0.9578
AUDUSD S. 0.7645 R. 0.7835
NZDUSD S. 0.7160 R. 0.7306
USDCAD S. 1.3025 R. 1.3133
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