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Friday, March 31st
The EUR/USD pair was trading around flat line in 20 pips range during Friday’s Asia, consolidating this week sharp decline in the region of 1.0680 level. Generally, the pair remains under pressure for the fourth consecutive session, that is mainly due to market’s revaluation of the ECB March statement, as the regulator recently made it clear that it is not in a hurry to raise rates or turn off QE program this year. Thereby, the divergence between ECB and Fed monetary policies has become more evident, providing negative effect to the common currency. The immediate focus now turns on block of economic releases from Eurozone, while the US docket will provide investors with only secondary reports, leaving the pair at the mercy of global market’s sentiments during the NA session.
The GBP/USD pair has eased part of its overnight gains, sliding below the level of 1.2500, however, remaining positive, as the USD stalled its recovery against its major rivals. Moreover, improved risk sentiments, backed by upbeat Chinese services and manufacturing reports, are also providing the pound with extra support at the end of this week. On the other hand, streak of positive US reports, seen this week, continues to cheer up markets expectations of aggressive Fed monetary policy tightening this year. Now attention turns toward events from the UK docket due later in EU session ahead, with crucial UK GDP report and denouement of Brexit process initiation, while the US docket will remain relatively quiet today, providing traders with only secondary data reports at the end of this week.
The USD/JPY pair failed to extend its gains, as US bulls have taken a breather, allowing the pair to retreat from its two-week highs, marked at 112.20 spot in Asia. However, mixed Japanese economic data and upbeat Chinese PMI reports, which improved risk appetite across the market somewhat, failed to provide any support to the yen. Meanwhile, USD price actions and broad market’s risk trend will remain as key catalysts for pair’s further movement, as the data calendar remains relatively uneventful for the pair on the last trading day of the week.
The NZD/USD pair has stalled its yesterday’s decline and now is trying to consolidate below 0.7000 spot, as US bulls took a breather this morning. Moreover, renewed risk-on sentiments, underpinned by auspicious Chinese manufacturing data, are also providing extra legs of support to the higher-yielding assets such, as the Kiwi. Moreover, mixed data from NZ economy failed to provide any impetus to the pair, as broadly higher sentiments around the greenback, lifted by renewed hopes of two more Fed rate-hikes this year, are driving market’s sentiments lately. Nothing much is scheduled in data calendar at the end of this week, so the USD dynamics and broad risk trend will remain as key drivers for the pair this Friday.
The main events of the day:
German Unemployment Change – 11.00 (GMT +3)
UK GDP – 11.30 (GMT +3)
EU Prelim. CPI – 12.00 (GMT +3)
Canadian GDP – 15.30 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0606 R. 1.0802
USDJPY S. 110.59 R. 112.61
GBPUSD S. 1.2343 R. 1.2587
USDCHF S. 0.9926 R. 1.0054
AUDUSD S. 0.7614 R. 0.7692
NZDUSD S. 0.6956 R. 0.7062
USDCAD S. 1.3251 R. 1.3399
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