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Tuesday, April 17th
The EUR/USD pair follows broad market trend this Tuesday, having broken through its resistance level of 1.2400. Recent gains of the pair could be mostly explained by weaker positions of the US dollar, as the US-China trade conflict and geopolitical concerns in the Middle East are still weighing the US currency. Adding to this, widespread demand for safety, backed by conflicts, where the US is involved, also supports the common currency lately, which, in turn, accelerates pair’s upside trend. On the data front, today we are expecting eventful session, as both economies have prepared important data reports, which will help the pair to form its further near-term trajectory this Tuesday.
The GBP/USD pair extends its northern march, having once again refreshed its 2-year highs at 1.4370 spot in European morning, which is the highest level since Brexit referendum. Seems that the market continues actively to price in a potential BoE rate hike, which is expected on the next meeting of the regulator. Moreover, broad retreat of the US dollar also supports the pair lately, as investors are still digesting recent trade conflict between the US and China, thus accelerating growth of the pound against its American counterpart. Today all traders’ attention will remain glued to the data from the UK labor market, which could affect market’s expectations of further BoE rate changes.
The AUD/USD pair lost its positive trend and gave away part of its yesterday’s gains, having marked the lower end of its daily range at 0.7760 spot. The main reason of pair’s slight retreat could be called dovish RBA minutes, which were released during the Asian trading session. As it was widely expected, the Bank didn’t surprise the market with any optimism regarding its further monetary policy. The policymakers agreed that there is no clear reason for interest rate changes in near-term projection. Moreover, the protocols showed some concerns of the regulator regarding risks for the Australian economy, which are related to household debt and China’s economic situation. However, the pair managed to turn around and gain some pips in early Europe on the back of broad sell-off of the US dollar, which remains one of the key driving factors across the market lately. In the day ahead, the US data calendar will bring as a bloc of data from the labor market, however, it is expected that widespread trend will continue to play the role of a key determinant for the pair.
The USD/JPY pair remains bearish for the second day in a row, having broken through the resistance of 107.00 this morning. Recent decline of the pair is mostly attributed to retreat of the US dollar against its major rivals on the back of latest conflicts, were the US is involved (the US-China trade conflict, geopolitical conflict in the Middle East). Moreover, it seems that risk-off sentiment continues to dominate the market in the first half of this week, as markets are still digesting recent developments in Syria. Adding to this, broad demand for safety received extra boost after China released bloc of mixed data, thereby accelerating decline of the pair. Later ahead, the US will publish data from the housing market, however, risk sentiment and the US dollar dynamics will remain key navigators for the pair during this trading session.
Major events of the day:
UK Average Earnings Index +Bonus – 11.30 (GMT +3)
UK Claimant Count Change – 11.30 (GMT +3)
German ZEW Economic Sentiment – 12.00 (GMT +3)
US Building Permits – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.2291 R. 1.2437
USDJPY S. 106.67 R. 107.81
GBPUSD S. 1.4184 R. 1.4420
USDCHF S. 0.9544 R. 0.9664
AUDUSD S. 0.7741 R. 0.7803
NZDUSD S. 0.7317 R. 0.7393
USDCAD S. 1.2525 R. 1.2643
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