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Thursday, July 5th
The EUR/USD pair remains positive this Thursday, having rallied for almost 50 pips and spiked the level of 1.1700 in early Europe. The latest gains of the pair can be mainly explained by news reports, citing that ECB members see a rate hike at the end of 2019 as too late. Moreover, ongoing retreat of the US dollar against its major rivals, backed by the looming US-China tariffs deadline, also offers some support to the pair this week. Looking ahead, today the EU data calendar will remain silent, so investors will pay attention to US releases and FOMC minutes, which will be able to spark some volatility during the NA session.
The GBP/USD pair trades in the north direction for the third consecutive session, having refreshed its weekly highs in the region of 1.3250. It seems that the pound is still trying to recover its positions after testing 7-month lows in the region of 1.3050 last week. Moreover, yesterday’s positive UK service PMI and inability of US bulls to resist pressure from pound’s side due to closed US markets also offered some support to the pair. However, the upside of the pair also looks limited, as the uncertainty over Brexit and broad risk aversion are putting some pressure on the pound. Today we have pretty busy session ahead, as the economic calendar will bring us the speech of BoE Governor M. Carney, US employment data and ISM Non-Manufacturing PMI, and the FOMC meeting minutes will hog the limelight in late NA session.
The USD/JPY pair stalled its retreat and performed a U-turn in early Europe, gaining more than 30 pips and entering the area of 110.60, despite persisting sell-off of the greenback. The recent growth of the pair can be mainly explained by dovish comments of BoJ’s Member of the Policy Board Ms. Takako Masai, who again reiterated that inflation target level of 2% is still far away. However, further gains of the pair look restricted, as markets are preparing for the US to implement new tariffs on Chinese imports. Moreover, Beijing stated that it does not want to unleash a war, but it would not stand aside in case of aggression, so markets are also expecting retaliation measures from China. On the data front, today we have a busy session ahead, as the US has prepared for us the ADP employment data, ISM non-manufacturing PMI, and FOMC meeting minutes, which will be able to bring additional trading opportunities during the NA session.
The AUD/USD pair is struggling to find a clear direction, having stuck between bulls and bears in the region of 0.7365-90. Persisting weakness of the US dollar remains the underlying theme across the market so far this week, thus offering support to the pair. On the other hand, reemerged risk-off sentiments amid upcoming US tariffs on Chinese imports and NFP report are limiting any gains of the higher-yielding Aussie. Meanwhile, today investors will focus their attention on a slew of US economic releases, while the key risky event for today will be the release of the FOMC meeting minutes, which is scheduled for the NA afternoon.
Major events of the day:
BoE Governor M. Carney’s Speech – 13.00 (GMT +3)
US ADP Nonfarm Employment Change – 15.15 (GMT +3)
US ISM Non-Manufacturing PMI – 17.00 (GMT +3)
US Crude Oil Inventories – 18.00 (GMT +3)
FOMC Meeting Minutes – 21.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1603 R. 1.1709
USDJPY S. 110.13 R. 110.81
GBPUSD S. 1.3137 R. 1.3297
USDCHF S. 0.9888 R. 0.9960
AUDUSD S. 0.7342 R. 0.7444
NZDUSD S. 0.6727 R. 0.6803
USDCAD S. 1.3085 R. 1.3195
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