Daily economic digest from Forex.ee

The EUR/USD pair extends its Friday’s positive trend on the back of broad retreat of the US dollar. The main reason of greenback’s weakness could be called escalation of the trade conflict between the US and China after the US President introduced new customs duties against China. However, now we are witnessing some decline in market speculations about the trade war, as investors are awaiting for any progress in US-China negotiations regarding trade conditions. In absence of any important data releases, scheduled for this Monday, the pair will continue to trace market sentiment, caused by recent world events and the US dollar dynamics.

The GBP/USD pair follows broad market trend this Monday, caused by easing risk aversion. Seems that fears of a trade war between US-China have eased somewhat, thus forcing investors to pay attention to more risky assets, such as the pound. Moreover, convergence between the Fed and BoE monetary policies after tow regulators’ meetings, where both Banks showed hawkish tone, also provides some support to the pair lately. In the day ahead, the economic calendar won’t bring us anything important, so traders will remain in anticipation of further developments regarding the US-China trade conflict.

The USD/JPY pair opened this week in the vicinity of 4-month lows, which are located below the level of 105.00. However, the pair managed to correct slightly higher on the back of profit taking actions after aggressive downside rally, seen in the second half of the previous week. Recall, on Thursday US President D.Trump signed a presidential memorandum, introducing new customs duties against China, thus adding extra fuel to the fire regarding ongoing fears of a trade war. Nevertheless, it is expected that the pair will continue to remain under bearish control, as risk-off sentiment is still gripping the market, while the US dollar continues to showing subdued dynamics lately. Today we have a rather quiet session due to the absence of any important economic releases, so broad market sentiment will remain the key navigator for the pair during this trading session.

The NZD/USD remains positive today, having refreshed its 7-day highs at 0.7285 spot, on the back of cooling off speculations around US-China trade war. Seems that the dust around trade conflict between the US and China has started to settle down, thus decreasing demand for safety. Moreover, positive NZ trade balance data, published in early Asia, also contributes to pair’s positive tone at the start of this week. However, upside trend of the pair looks limited lately, as markets remain cautious, awaiting for another round of the US-China tariff talks. Looking ahead, nothing important is scheduled in the economic calendar from both sides, so widespread market trend will help the pair to form its near-term trajectory at the start of this week.

Major events of the day:

None

Support and resistance levels for the major currency pairs:

EURUSD S. 1.2265 R. 1.2417

USDJPY S. 104.18 R. 105.60

GBPUSD S. 1.4040 R. 1.4216

USDCHF S. 0.9418 R. 0.9520

AUDUSD S. 0.7651 R. 0.7765

NZDUSD S. 0.7162 R. 0.7308

USDCAD S. 1.2771 R. 1.2999

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