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Friday, May 18th
The EUR/USD pair trades with mild bullish bias this Friday, keeping its positions above the level of 1.1800, after brief consolidation phase, witnessed during the previous NA session. It seems that the pair has finally stalled its downside trend after four consecutive days at a loss. The main reason of pair’s recent recovery can be called another downside correction of the US dollar against its major rivals. However, the pair remains under notable bearish pressured lately, as significantly increased divergence between the Fed and ECB continues weighing on the common currency. In the day ahead, the broad market trend will remain the exclusive driver for the pair, as economic calendar won’t bring us anything relevant this Friday.
The GBP/USD pair remains flat this Friday, oscillating within the range of 1.3505-25. Yesterday the pair caught fresh wave of bids, having tested the region of 1.3570, on news headlines that the UK will remain in the EU customs union if it is necessary to avoid a 'hard-Brexit' scenario. However, upside rally of the pair was short-lived, as UK Prime Minister Theresa May refuted this news, stating that the UK would certainly leave the customs union and the EU. In addition, subdued dynamics of the US dollar also provide support to the pair at the last working day of the week. Looking ahead, today widespread market sentiment will continue to determine pair’s further direction, as both economic calendars don’t contain any relevant releases for this Friday.
The USD/CAD pair is trading on a positive note at the end of this week, having refreshed its intraday highs on the level of 1.2846, despite slight downside correction of the US dollar. The Loonie received notable bearish impetus in Asia on news that sides failed to reach any workable agreement during negotiations on NAFTA. And now the negotiations could be additionally slowed down, as Mexico gears up for a Presidential election, which could be another source of uncertainty, thereby putting additional pressure on the Canadian dollar. On the data front, today the US economic calendar won’t surprise investors with any relevant data reports, while the Canada will release important CPI and retail sales figures, which will able to bring some fresh trading opportunities during the NA session.
The USD/JPY pair continues to show positive dynamics for the fifth consecutive session, having refreshed its 4-month highs on the level of 111.00. The pair today received another bullish impetus during the Asian session, following weaker-than-expected Japanese inflation figures. Moreover, softer Japanese core CPI prints reaffirmed that the BoJ will continue to adhere to ultra-ease monetary policy, thus increasing divergence between the Fed and BoJ, which in turn additionally weighed on the Japanese currency. As for the data, nothing much is scheduled in the data calendar for this Friday, so broad market trend will remain as an exclusive driver for the pair during today’s trades.
Major events of the day:
Canada Core CPI – 15.30 (GMT +3)
Canada Core Retail Sales – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1743 R. 1.1865
USDJPY S. 109.78 R. 111.36
GBPUSD S. 1.3424 R. 1.3614
USDCHF S. 0.9965 R. 1.0059
AUDUSD S. 0.7468 R. 0.7570
NZDUSD S. 0.6830 R. 0.6960
USDCAD S. 1.2711 R. 1.2877
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