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Friday, January 20th
The EUR/USD pair has lost its bullish momentum and is erasing its daily gains, backed by broad dollar’s weakness. Yesterday the pair performed an abrupt drop after dovish ECB press conference, during which Chief of euroland’s CB M.Draghi admitted that upward trend of the EU inflation remains unconvincing, but noting that the outlook for further quarters looks better. However, shortly after the pair turned around and bounced off its yesterday’s lows, located at 1.0589, as Fed Chairwoman J.Yellen delivered her dovish speech, in which she admitted that the fiscal policy may affect the Fed’s outlook, however, the situation remains unclear. Currently the pair continues to dip as traders are locking in some profits ahead of another risky event of this week – D.Trump’s inauguration speech, that is scheduled on NA session.
The pound is trying to consolidate its recent gains against its American counterpart, led by broad dollar’s sell-off versus its main competitors. Wave of selling pressure around the greenback approached the market in Asia, after less hawkish Fed Chief J.Yellen’s speech, that is still weighing the US currency. Moreover, hard Brexit concerns have somewhat eased a grip after recent UK Prime minister T.May’s speech, that is lending extra support to the pair. Immediate focus now remains on UK dataflow, while today US President D.Trump’s speech will take center stage at this trading session.
The USD/CAD pair regains its bullish tone after brief consolidation, seen in Asia. Earlier the pair performed minor correction, backed by J.Yellen’s dovish comments, however, remaining for almost three cents higher than this week lows, marked in the region of 1.30. Moreover, slight correction in oil prices after yesterday’s increase in crude inventories is also limiting pair’s gains. Another busy trading session is due later this day with Canadian inflation reports along with the speech by D.Trump.
The AUD/USD has reversed its overnight gains, led by auspicious Chinese GDP figure, stepping away from its 9 week highs, marked at 0.7588 handle. However, recent US dollar’s weakness continues limiting pair downside traction, as traders are still digesting J.Yellen’s dovish comments. On the other hand, shrinking risk appetite ahead of the main event of this Friday - D.Trump’s inauguration speech, which will have major impact on the USD moves, is negatively influencing higher yielding assets. Nothing else is scheduled in data calendar for this Friday, so the pair will continue to follow global market sentiments until NA session.
The main events of the day:
UK Retail Sales – 11.30 (GMT +2)
Canadian Core CPI – 15.30 (GMT +2)
Canadian Core Retail Sales – 15.30 (GMT +2)
US President D.Trump’s speech – 19.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0554 R. 1.0730
USDJPY S. 113.73 R. 116.17
GBPUSD S. 1.2220 R. 1.2402
USDCHF S. 0.9994 R. 1.0156
AUDUSD S. 0.7461 R. 0.7623
NZDUSD S. 0.7084 R. 0.7252
USDCAD S. 1.3206 R. 1.3408
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