EUR/USD spikes to 3-day high ahead of US economic releases
The EUR/USD pair's has gained further traction in the past hour, assisting the pair to accelerate through 1.0450-55 resistance area.Currently trading at three-day peak, around 1.0470 region, the pair was seen building on Wednesday's tepid recovery gains as the US Dollar extended its profit taking slide from 14-year highs. Meanwhile, looking at the pair's sharp up-tick of around 25-pips in the past hour, the pair seems to have taken out some stops and hence, it would be interesting to see if the up-move is sustainable or is just a stop-run. Next in focus would be US economic docket, featuring the release of final GDP print, durable goods orders, weekly jobless claims, personal income / spending data and the Fed's preferred inflation gauge - core PCE price index. A follow through buying interest has the potential to lift the pair towards 1.0500 psychological mark above which the recovery could get extended towards 1.0530-35 resistance area. On the flip side, 1.0450 level now seems to protect immediate downside below which the pair is likely to drift back towards 1.0400 round figure mark.
GBP/USD mildly weaker below 1.2350, US data in focus
The GBP/USD pair faded an intraday bullish spike to session high level of 1.2378 and drifted into negative territory for the fourth consecutive session.Currently trading around 1.2340-45 region, having posted a session low at 1.2328, the pair extended its consolidative price action and remained capped below 50-day SMA, break-down confirmation support. The pair, however, has been able to hold its neck above 1.2300 handle as the US Dollar slipped farther from 14-year highs, primarily led by profit-taking ahead of important US macro releases. Today's US economic docket features the release of final Q3 GDP print, durable goods order, weekly jobless claims and the Fed's preferred inflation gauge - core PCE price index. In-line with expected numbers would add on to the hawkish Fed outlook, but is unlike to have a major impact on the major amid thin market liquidity conditions ahead of Christmas holidays. Immediate downside support is seen at 1.2315-10 region, which if broken decisively is likely to accelerate the slide towards 1.2240-35 intermediate support, en-route 1.2200 round figure mark. On the upside, momentum back above 1.2360-65 area might provide a boost towards 1.2400 handle ahead of 50-day SMA important hurdle near 1.2420-25 region.
Japan risk: Faster-than expected yen depreciation - BNPP
Analysts at BNP Paribas suggests that in Japan, the weaker yen is in focus and expects the Japanese economy to continue growing at a moderate pace and inflation to pick up somewhat in 2017, causing the BoJ to edge towards policy tightening.“Given the prospect for higher US rates, the top risk is that the yen depreciates even faster than we expect, and the BoJ hikes the target for the long-term rate to rein in ‘excessive’ yen weakness. With the economy at full employment, it is possible that wages accelerate significantly and more than offset the negative impact of yen depreciation on households’ purchasing power.“The odds of this scenario are low in our view, however, given entrenched zero-inflation expectations. This is reflected by firms and unions in their wage negotiation for the next financial year. Rather than curbing yen depreciation by tighter monetary policy, the authorities could instead try to assuage public discontent with weak yen by providing fiscal support. In this case, the yen would weaken further and inflation pressure should mount. The main downside risks for Japan are external factors. The main policy tool to counter adverse shocks (such as global slowdown and yen appreciation) would be fiscal policy, not monetary policy.”
USD/CHF capped by 5-DMA ahead of US dataflow
The USD/CHF pair extends the losing streak into a second day today, although the bulls found some respite just ahead of 10-DMA located at 1.0238.The USD/CHF pair keeps the offered tone intact amid broad based US dollar softness and mixed performance on the European equities amid light trading ahead of the Christmas/ New Year holiday season.Moreover, the Swiss franc continues to cheer upbeat assessment of the Swiss economy, as reflected in the SNB quarterly bulletin published yesterday. The bulletin stated that the Swiss economy is likely to recover further in the coming quarters, as positive incoming economic data are pointing towards a brighter picture of the economic growth in the near term.The immediate focus remains on a spate of US economic data due to be reported in the upcoming US session.To the upside, the next resistance is located at 1.0301 (Dec 21 high) and above which it could extend gains to 1.0331 (Nov 2015 high) and 1.0346 (multi-year high) next. To the downside, immediate support might be located at 1.0237 (10-DMA) and below that 1.0200 (round figure) and from there to 1.0184 (20-DMA).
EUR/GBP hits two-week high at 0.8470
Extending its bid tone for the fourth consecutive session, the EUR/GBP cross is now building on to its recovery move back above 0.8400 handle.Currently trading around 0.8465 level, a tepid recovery bounce witnessed around the EUR/USD major, from 14-year lows, has been the sole driver of the pair's ongoing recovery trend since the beginning of the week. Moreover, a subdued trading action around the GBP/USD major, in wake of thin market liquidity conditions ahead of year-end holiday season, failed to hinder the pair's up-move to two-week high. In absence of any market moving releases, either from the Euro-zone or UK, the current leg of recovery could also be attributed to short-covering following the pair's recent slide to nearly 5-month low, to the vicinity of 0.8300 handle. Investors on Thursday will focus on US macro releases, which might have a diverging effect on the shared currency and the British Pound, eventually provide some impetus for the EUR/GBP cross.Immediate upside resistance is pegged near 0.8485 level above which the cross seems all set to surpass 0.8500 psychological mark resistance and head towards its next major hurdle near 0.8545-50 region (monthly highs). On the downside, 0.8430 level now becomes immediate support, which if broken might drag the cross back towards 0.8400 handle, en-route 0.8365-60 strong horizontal support.
Gold consolidating recent losses to 10-month low
Gold showed little movement on Thursday and was confined in a narrow trading range, as investors awaited a slew of US economic releases. Currently hovering around $1131-32 region, thin market liquidity conditions, ahead of Christmas holiday, has led to the dull price-action around the precious metal. Meanwhile, the ongoing mild profit-taking slide around the US Dollar seems to be lending some support. Moreover, cautious opening in European equity markets also seems to be supporting the metal's safe-haven appeal, albeit has failed to assist any meaningful recovery from over 10-month lows touched in the aftermath of hawkish Fed outlook for 2017.The US economic docket will continue to grab investors' attention on Thursday and might provide some short-term trading opportunities during early NA session.Important US macro releases, slated for release on Thursday, include - the final GDP growth number for Q3 2016, durable goods order for November, personal income / spending data along with the Fed's preferred inflation gauge - core PCE price index for the month of November. Today's US economic data would be looked upon for fresh impetus for the greenback and eventually drive dollar-denominated commodities - like gold.From current levels, momentum above $1135 level could get extended towards $1140 resistance area above which a fresh bout of short-covering could lift the commodity above $1150 resistance towards $1158-60 strong hurdle. On the downside, the metal might continue to find support near $1125 level, which if broken decisively should accelerate the fall towards $1110 support, en-route $1100 psychological mark.
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