Marketwatch

FIBO_Group

Master Trader
Jun 20, 2016
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www.fibogroup.com
The latest report on changes in the level of business activity in the services sector in China significantly exceeded analysts’ expectations, which provided additional support to commodity currencies.

I’ll draw your attention to the AUD/USD currency pair, which has come close to the technical resistance area of 0.7000–0.7070. Despite rising 240 points without any significant corrections, again today the pair managed to gain another 100 points. As a result, this marks three straight days of abnormal growth and therefore, the risk of corrective decline remains increased.

A Strengthening AUD indicates an increased tolerance for risk, which is also confirmed by the collapse of JPY paired with most currencies. Despite the general weakening of the USD, which also serves as a safe haven currency, the USD/JPY currency pair has strengthened by more than 120 points in just one trading day - this is the maximum intraday volatility since May 11 of this year.

And now let's move on to the latest release on changes in the unemployment figures from Germany. Despite coming in higher than analysts’ expectations, selling activity of the EUR/USD currency pair remains moderate indicating that the disappointing data from the labor market in Germany is not major news or critical for EUR.

Moving to the American trading session, I will note the upcoming announcement of the latest interest rate decision from the Bank of Canada. The probability of a reduction in rates is extremely low, so it is better to focus on the monetary statement surrounding this decision. Optimistic comments from the Central Bank may provide additional support for CAD, which is already strengthening against the backdrop of rising oil prices.

And I will complete today's review with news on the protests in the United States, which has already brought thousands of protesters to the streets. The protests have turned violent and are and are accompanied by massive robberies and vandalism which is bad news for the US dollar. Further aggravation of the situation will contribute to a further weakening of the USD in the short term.

That’s all for me. Closely monitor the news background and be prepared for all the surprises of the market.
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