Russia to respond for expulsions
IronFX | Mar 29, 2018 04:50AM ET
Russia to respond for expulsions
- The Kremlin stated yesterday that Russia will definitely respond to the expulsion of Russian diplomats in its own time. No details were given, however, the response should reflect Russian national interests. Media suggest that Brussels expects the EU to hold the line, while New Zealand seems not to be joining. On the other hand, the UK seems to plan an investigation on money laundering through property schemes. Overall the Russian response, as well as the UK money laundering investigation, could imply that the issue will extend further in time but also that it could spill over on other international relationships issues. Overall, there could be a further escalation of the situation and more negative headlines could increase uncertainty.
- EUR/USD traded in a sideways manner yesterday morning, however, developed some bearish tones breaking the 1.2355 (R1) support line (now turned to support), as the US financial data supported the USD. The pair could trade in a sideways manner today with some bullish tones as the financial data due out today could favor the common currency, especially the German HICP rate for March. On the technical aspect, please note that the pair’s direction has been supported by an upward trend-line since the 7th of April 2017, while since the 17th of January has entered a sideways movement direction, still above the aforementioned upward trend-line. If the bulls take the driver’s seat we could see the pair breaking the 1.2355 (R1) resistance line and aim for the 1.2455 (R2) resistance hurdle. On the other hand, if the bears take the reins, we could see the pair continue trading southwards maybe even breaking the 1.2230 (S1) support line.
NAFTA negotiations could accelerate
- US officials stated yesterday that the NAFTA negotiations could pick up the pace and be wrapped up quickly. They also stated that all three parties want to move forward and that there is only a short window because of the Mexican elections on the 1st of July and called for an agreement in principle. On the other side, Canadian negotiator Verheul was more downbeat, as he stated that lot of work still needs to be done. The eighth round of negotiations is to begin next month in the US and any positive headlines could support the USD, CAD, MXN.
- USD/CAD traded in a sideways manner with a bullish tone yesterday, breaking the 1.2910 (S1) resistance line, now turned to support. The pair could continue to trade in a sideways manner however it may also show some bullish tendencies as financial data due out today could weaken the CAD side. On the technical side, the pair seems to be trading above the upward trend-line incepted since the 2nd of February. On the other hand, in the daily chart, one could argue that a head and shoulders formation started to form since 28th of February, however the part of the right shoulder is still incomplete. Should the pair find fresh buying orders we could see it aiming or even breaching the 1.3080 (R1) resistance line. Should it come under selling interest we could see it breaking the 1.2910 (S1) support level and aim for the 1.2800 (S2) support barrier.
Get The News You Want
In today’s other economic highlights:
- During today’s European morning we get Germany’s unemployment and inflation data for March as well as UK’s HPI for March and GDP growth rate for Q4. In the North- American session we get the US Personal consumption rate for February as well as Un. Michigan Consumer Sentiment for March. From Canada, we get the GDP growth rate for January.
- As for speakers, Philadelphia Fed President Harker speaks.
EUR/USD
·Support: 1.2230(S1), 1.2100(S2), 1.1920(S3)
·Resistance: 1.2355(R1), 1.2455(R2), 1.2680(R3)
USD/CAD
·Support: 1.2910(S1), 1.2800(S2), 1.2610(S3)
·Resistance: 1.3080(R1), 1.3280(R2), 1.3350(R3)
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