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22 January Forex daily review

Sergiy Zlyvko
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In Wednesday trading on the foreign exchange market has multidirectional nature: The U.S. dollar rose against the single currency and the Swiss franc and fell against the British pound and the Australian dollar.

GBRUSD rate rose sharply after the release of positive data on the labor market and the UK Bank of England protocols. Australian dollar strengthened in the first half of the day following the Canadian dollar in anticipation of the Bank of Canada decision announcement. After the meeting of the Bank of Canada US dollar has updated the maximum against the Canadian dollar and recovered losses against the Australian dollar.

British pound in a few minutes strengthened against the dollar by 90 basis points to 1.6550 and to the closure of the European session reached 1.6585. Pound has been bought in crosses, eventually other currencies with the dollar came under pressure. By the end of the day, EURUSD fell from 1.3580 to 1.3545 high. GBPUSD closed at 1.6575 area.

In the morning after the publication of weak index of business activity in the manufacturing sector in China from HSBC AUDUSD rate fell by 40 pips to 0.8790. The Canadian dollar fell by 60 pips against the U.S. dollar. The EURUSD and USDCHF consolidated in the range of 25 points. Now AUDUSD has formed bearish trend. After the rollback the breakdown from 0.8795 to 0.8765 and fall is possible.

From 7.45 to 9.00 GMT business activity in the countries of the Eurozone PMI are going to be published. According to forecasts, the growth of business activity is expected, the background correction movement of EURGBP cross-rate, there are rising risks to the news the euro will rise above 1.3565. By the close of trading in Europe, the EURUSD is expected to decline to 1.3490. Rising above 1.3580 will cancel the main scenario. DXY index predicted to grow up to 81.50.

Yesterday AUDUSD increased in Asia after the Canadian dollar, when inflation in Canada data was published. In the evening, after the meeting of the Bank of Canada, the Australian dollar and the Canadian dollar fell against the U.S. dollar. In the morning AUDUSD fell on Chinese data. The pair stopped at 0.8885. We rarely insert it, but it turned out that there are several levels coincided. The main scenario for Thursday are expected from AUDUSD correction and afternoon drop to 0.8765. If by some miracle the mood of the Australian dollar has changed dramatically, the price will quickly return to 0.8860.

USDCHF rate during the day was consolidated at 0.9120. False break of the trendline was recorded. Today we consider USDCHF growth to a new high. As an objective we expect 0.9030 mark as a goal.

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