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Forex Market UpdateEUR strength continued through the Asian session on the ECB's post-meeting conference
ECB chairman Trichet set the stage when he sited the CB's hawkish stance on policy, giving the market a confirmation of further rate hikes to come.
MAJOR HEADLINES â€“ PREVIOUS SESSION
â€˘ Canadian building permits (MoM) March, out at 5.3% vs. 2.0% expected.
â€˘ Canadian ivey purchasing managers index April, out at 55.7 vs. 59.0 expected.
â€˘ US initial jobless claims April 29, out at 322K vs. 310K expected.
â€˘ US unit labor costs (Q1 P), out at 2.5% vs. 1.2% expected.
â€˘ US continuing claims April 22, out at 2462K vs. 2450K expected.
â€˘ US non farm productivity (Q1 P), out at 3.2% vs. 3.0% expected.
THEMES TO WATCH â€“ UPCOMING SESSION
Both the BoE and the ECB left rates unchanged, but it was the wording by ECB chairman Trichet, that made the market decide to buy Euroâ€™s and once again sell the dollar across the board. Trichet used the word â€śvigilanceâ€ť three times which has sort of become the â€ścode wordâ€ť for the market to take a bullish stand on the EUR and the future rate hikes in the Euro-Zone and was the reason for the market to send EURUSD above 1.2700 and GBPUSD above 1.8500.
USDJPY continues to disappoint for the bears as the cross EURJPY buying leaves USDJPY almost unchanged on the weaker EURUSD yesterday. It seems as if the focus has changed for now to EURJPY as the pair looks set for a possible test of the highs from April at 145.50.
Note: the support/resistance levels used in the matrixâ€™s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur
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