At the beginning of the week, Asian stocks are trying to boost the regional MSCI index to its maximum of 10 years thanks to enter 2018 with good humor by investors in New York City. Monday’s volatility during the first hours of trade was partially limited by the celebration of National Adult Day in Japan. Among all G10 currencies, the strongest remains the Canadian dollar (0.1%), which is trying to stabilize USD / CAD near 1.2410. The reorganization of sentiment in industrial metals markets is not useful for the Australian dollar (-0.3%) pushing the AUD / USD to 0.7840. Currently, EUR / USD is trying to get back below the key 1.2000 psychological level, which can be supported by the influx of some hawkish tone by FOMC members.
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The likelihood of the position that supports the strength of the US dollar increases with scheduled speeches of John Williams (19:35 CET) and Eric Rosengren (2200 CET) on the conference on inflation targeting strategy. However, the economic calendar Monday is not interesting at all. The estimated retail sales in the Eurozone (11:00 CET) should be considered as an attractive eye due to the entry of not only the soft data widely used, but also the subcomponents of the member states.
The 161.8% Fibonacci extension (136.55) has been successfully stopped the recent upward climb, so the scenario back to the top band Eroded consolidation (134.30) reinforced by the 50.0% Fibonacci. Recoil and the level indicated by analyzing overbalanced is currently on the table. However, the baseline scenario is to maintain the bullish mood states in the game, so it is very likely to extend gains above 136.55.
EUR / USD is still above aggregation Fibonacci 38.2%, rising trend line short – term level indicated by analyzing overbalanced (1.1990). According to the situation presented in the H4 chart, the scenario of erasing recent losses and start the bullish rally is on the table at this time. The full range of potential gains appears to be limited by early January highs near 1.2080.
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