The US inflation report did not have any surprises in it. Headline and core May CPI rise 0.2%, as expected. Traders immediately shifted their focus to Wednesday afternoon’s FOMC policy statement and press conference.
FX traders were. The bought US dollars across the board in early Asia trading. They soon realized that this meeting wouldn’t have any FX implications and looked ahead to upcoming economic data from the UK, Eurozone and US.
EURUSD bottomed out at 1.1742 in Asia and then climbed to 1.1808, supported by concerns of a hawkish outcome at Thursday’s ECB meeting. A weaker ZEW Survey, including Economic Sentiment, and Current Situation, capped the rally and prices retreated to 1.1790 in early New York trading.
GBPUSD dropped to 1.3344 alongside EURUSD in Asia. Prices rebounded to 1.3417 ahead of the New York open. UK Labour data was mixed. Wage growth slipped, and the unemployment rate was unchanged.
USDJPY peaked at 110.48 on broad US dollar strength during the Singapore summit but dropped to 110.20 in early New York trading. USDJPY is trading with a bid tone ahead of the FOMC meeting.
AUDUSD traded in a 0.7586–0.7622 range. NAB Business Confidence data was weaker than expected which helped to limit topside gains. NZDUSD tracked AUDUSD moves in a 0.7000-0.7044 range.
Asia equity markets closed with gains. Eurozone markets haven’t fared as well. They are flat to negative while US equity futures suggest a soft opening on Wall Street.
USDCAD traded quietly and hovered around the 1.3000 area. The sentiment is bullish ahead of the FOMC meeting and because of heightened trade risks.
USDCAD Technical Outlook
The intraday USDCAD technicals are bullish above 1.2970, an uptrend line guarding further support at 1.2870. A break above resistance in the 1.3040-70 area will shift the focus to 1.3125 and then 1.3350. A move below 1.2870 suggets further 1.2770-1.3060 consolidation.
Today’s Range 1.2980-1.3050