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Thursday, May 18th
Today the EUR/USD pair once again refreshed its half-year highs at 1.1172 spot in Asia. However, the pair was unable to hold its positions and returned to the region of 1.1130-40, thereby bringing to end its 4-day winning streak. Seems that US bears decided to take a breather, forcing the pair to correct lower after its strong northern rally, led by Trump’s controversy. Additionally, pair’s minor retreat can be also attributed to wave of profit-taking actions after massive rally of the euro, seen earlier this week. Today several speeches by ECB members will take center stage, while data, scheduled in the US docket, will also have some impact on the pair during NA session.
The Aussie remains one of the best performers of this Asian trading session, allowing the AUD/USD pair to refresh its 2-week highs at 0.7467 level, following upbeat data from Australian labor market. Nevertheless, further pair’s gains were capped, as recent US President D.Trump’s actions continues to navigate the market, thereby broadly fueling risk-aversion sentiments. Moreover, mild recovery of the greenback and weaker sentiment surrounding commodity space, especially copper, are also adding some pressure on the Aussie this Thursday. Nothing much is scheduled in data calendar for the pair, as the US will release only Philadelphia Fed Manufacturing Index later in NA session, so global market’s sentiments, backed by latest political developments in the US, will continue to determine pair’s further directional course during this trading session.
Unlike the Australian currency, the Yen was the weakest asset in the basket of major currencies, allowing the USD/JPY pair to bounce off its nearly 4-week lows, posted today at 110.54 level, and keep bearish trend throughout the Asian trading session. Yesterday the pair came under strong selling pressure amid intensifying political turmoil in the US, which in its turn triggered strong risk-aversion sentiments across the market, boosting demand for safe-haven assets, such as the Yen. However, the yen was unable to hold its bullish trend and allowed the pair to regain its upside in Asia, despite upbeat Japan’s GDP report, as dust surrounding recent weak US reports has started to settle down, bringing relief to the greenback. Looking ahead, today the US economy will release Philly Fed manufacturing index and bloc of secondary reports from the labor market during NA session, while global market’s sentiments will also remain as a key driver for the pair this Thursday.
The GBP/USD pair remains capped below the level of 1.30, failing in several attempts to break through its psychological resistance earlier this session. Seems that US bears have stalled its yesterday’s decline in Asia, thereby restricting pair’s upside. Adding to that, recent events from the US political field continues to boost risk-off sentiments across the market, providing extra pressure to the pound, since it is a higher-yielding asset. On the other hand, a sharp decline in the pair is also unlikely, as traders now remain cautious ahead of crucial UK Retail Sales data, which are expected later in European hours. Besides UK Retail Sales, the US economy will release Philadelphia Fed Manufacturing Index, which also will be able to bring some impact to the pair.
The main events of the day:
UK Retail Sales – 11.30 (GMT +3)
Philadelphia Fed Manufacturing Index – 15.30 (GMT +3)
ECB President M.Draghi’s Speech – 20.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1050 R. 1.1216
USDJPY S. 109.22 R. 113.92
GBPUSD S. 1.2870 R. 1.3040
USDCHF S. 0.9721 R. 0.9891
AUDUSD S. 0.7366 R. 0.7476
NZDUSD S. 0.6853 R. 0.6989
USDCAD S. 1.3534 R. 1.3676
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