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Session Recap: USD shines as market sentiment deteriorates

FXstreet.com (Córdoba) - The US dollar strengthened on Wednesday, with the EUR and the GBP as the main losers, although there seems to be no major catalyst for the move. EUR/USD failed to break above 1.3200 and pulled back to the 1.3115 area, while GBP/USD dropped over 150 pips throughout the day to a low of 1.5227, weighed by UK employment data.

European stocks are broadly lower while US futures point for a negative opening as market sentiment remains very fragile.

Main Headlines in Europe (in chronological order):

UK: Claimant Count Change falls further in March against expectations

BoE Minutes: MPC voted 6-3 to keep stimulus steady

EMU: Construction Output decreases 0.8% in February

Fundamental Morning Wrap: Korea and Gold in focus

European markets fall for the fourth day in a row

Euro capped at 1.3200 for now

Commodities Brief – Precious metals bounce, gold pares losses to trade at 1389

European Parliament disapproves of the way Cyprus bailout was handled

Forex Flash: Gilts held at key 118.61 mark – RBS

The price of gilts was held at 118.61, the 123.6% Fibonacci projection from the March impulse wave. According to Technical Strategist Dmytro Bondar at RBS, “There also was an island reversal; formation on Friday, suggesting the gap and Fibonacci level of 118.97 to become a major support. We favor buying dips near 118.97/119.06, looking for a recovery to 119.56/93 onto 120.50 on a caveat of a sustained break below 118.61”.
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Forex Flash: USD/CAD risk comes in the BoC outlook – TD Securities

In regard to the BoC policy meeting of today, being one of Governor Carney’s last major policy decisions before he leaves for the BoE, TD Securities analysts expect much attention given to the event. “The overnight rate will remain at 1.00% and the statement will continue to reflect a very mild tightening bias, it is widely expected”, wrote analysts Shaun Osborne and Greg Moore, adding that “the risk for the CAD comes in the messaging on the outlook, however, with the BoC likely to moderate further its message on the economy considering the weak growth trend evident in the domestic economy so far this year”. In terms of USD/CAD trading, TD Securities analysts note that the market has struggled in the mid/upper 1.02 area so far this week but a clear push through 1.0250/60 intraday should be enough to signal an extension of this move up chart-wise. “The USD/CAD has been consolidating since the early March peak and this week’s push through resistance in the 1.02 are should signal the start of the next trending leg higher (we think 1.06 is reachable by mid-year)”, they concluded.
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