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Friday, December 23rd
On Thursday the EUR/USD pair stepped into the region of 1.05 inspired by good news from Italy. Yesterday the Italian government approved the program aimed to support fragile banks, with one of the most injured - Monte Dei Paschi, that is the third largest commercial and retail bank in Italy. The Italian government will provide more than 20 billion euros within banks’ support program. But nevertheless, the major faded the spike quickly as the US dollar remains broadly stronger and is limiting euro’s sharp upper moves. However, seems that euro bulls are still strong enough to maintain pair’s growing trend this Friday. Currently the main currency pair is trading around the mid-point of 1.04 level stepping away from its overnight lows marked at 1.0435.
The pound keeps loosing points against its American counterpart remaining in bearish trend for the fifth session in a row. Currently the GBP/USD pair is trading near its 7-week lows posted at 1.2271 spot as shrinking risk appetite amid lowered trading volumes continues pressuring higher-yielding assets such as UK’s currency. The GBP also remains bid on expectations of the next year, when UK government will start the exit process from the EU, that adds some cautious moods around the pair. Today the GBP/USD pair most likely will stay in its bearish trend amid pre-Christmas thin markets, while UK GDP on a quarterly basis and US New Home Sales will bring some impetus for the pair.
The USD/JPY pair keeps slightly lower this morning showing minor signs of life amid broadly muted markets. However, the dollar/yen pair is trading in the region of its daily lows marked at 117.30 down from its overnight tops posted at 117.61 as traders are taking some profit off the table on the eve of Christmas holidays. Expectedly, the pair will continue to run in a silent mode this Friday as Japanese market are closed today due to Emperor's birthday celebration. Only US New Home Sales report is scheduled in data calendar for this day, which most probably will be ignored amid holiday-thinned market conditions.
Seems that the Kiwi manages to keep a smile against the greenback for the second day in a row after positive NZ GDP report seen on Wednesday. Strong data from New Zealand’s economy have weakened markets’ expectations of further RBNZ monetary policy easing. Moreover, slightly weaker tone around the US dollar is also supporting the NZD/USD pair lately. Nothing much is scheduled for the pair in economic calendar of this Friday, except data from American housing market, which most likely will be muted amid lowered activity across the market.
The main events of the day:
UK GDP – 11.30 (GMT +2)
Canadian GDP – 15.30 (GMT +2)
New Home Sales – 17.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0373 R. 1.0531
USDJPY S. 116.94 R. 118.16
GBPUSD S. 1.2212 R. 1.2414
USDCHF S. 1.0196 R. 1.0298
AUDUSD S. 0.7164 R. 0.7284
NZDUSD S. 0.6866 R. 0.6944
USDCAD S. 1.3359 R. 1.3581
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