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Thursday, March 23rd
The EUR/USD pair failed to hold its recovered positions and fell back in early Europe to the region of its overnight lows, marked at 1.0782 spot, amid improved risk-on sentiments. However, pair’s further downside traction appears fragile, as cautious sentiments ahead of the Trumpcare bill vote are getting stronger, thereby providing the euro with some support. If the bill is not be approved by Congress, then it will raise concerns about D.Trump's ability to fulfill his election promises, which will become a key driver in the market in the mid-term projection. On the other hand, if Obamacare does not survive the vote, it will encourage investors to think about prospects of further fiscal reforms, that will return risk-off trend to the market. However, news that E.Macron widens the gap on the French presidential election race, leaving M.Le Pen behind, are positively influencing the euro lately. Looking ahead, today data from US housing market and few Fedspeaks will also be able to attract traders’ attention later in NA session.
The NZD/USD regained its positive tone after solid decline, led by eventless RBNZ statement, amid risk-on sentiments reset. The bird came under strong selling pressure, refreshing its overnight lows at 0.7025 spot, after CB of NZ left its OCR unchanged, while noting in the statement that accompanied the decision, that their policy will remain accommodative for a considerable period. However, the pair managed to bounce-off overnight lows, as risk sentiments improved somewhat, thereby lifting the higher-yielding Kiwi. However, today investors will stay focused, as we are getting closer to the crucial Obamacare replacement bill vote in the House of Representatives, that is the major risk event of this Thursday, especially taking into account latest concerns around D.Trump’s policy.
The GBP/USD pair is trading in south direction this morning, retreating from its recent highs, posted at 1.2514 mark, mostly driven by RO-RO trend. Earlier in Asia the pair caught fresh bids amid renewed risk appetite, refreshing its monthly tops, however, the spike was faded quickly, as cautious sentiments are gathering the pace ahead of the US House vote on the Trumpcare bill, that could trigger another wave of risk rejections, driving flows away from higher-yielding assets, such as UK currency. Moreover, the pair remains pressured lately, as the market is still digesting recent headlines of a terrorist attacks on the UK parliament, that still are negatively influencing the pound. Today beside vote on the Trumpcare bill, UK Retail Sales and US New Home Sales will also be released during this trading session, providing investors with additional short-term trading opportunities.
The dollar/yen pair is trimming its recovered positions, eyeing to retake its key support level of 111.00. Yesterday the pair managed to refresh its 4-month lows at 110.73 mark, amid broad greenback’s weakness. However, flash of risk-on sentiments, seen in Asia, forced the pair to step back from its recent lows. Nevertheless, currently the pair is trading in south direction, as cautious sentiments are gathering pace across the market ahead of the crucial vote on the US President Donald Trump's healthcare bill, that could once again trigger wave of risk aversion sentiments across the market, thereby providing extra support to safe-haven assets, such as the yen.
The main events of the day:
UK Retail Sales – 11.30 (GMT +2)
Fed Chair J.Yellen’s speech – 14.45 (GMT +2)
US New Home Sales – 16.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0750 R. 1.0848
USDJPY S. 110.17 R. 112.27
GBPUSD S. 1.2387 R. 1.2553
USDCHF S. 0.9848 R. 0.9978
AUDUSD S. 0.7618 R. 0.7718
NZDUSD S. 0.6988 R. 0.7100
USDCAD S. 1.3262 R. 1.3442
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