Previous session overview
The fall of the US Dollar has taken a pause. EURUSD returned from its high to test the 1.4050 key support again - it has held fine so far, the level has not yet been seen today. GBPUSD underperformed, overreacting in a similar way it was during the rise. From its high above 1.64, the pair fell through 1.6335 to trade as low as 1.6285.
USDJPY has not been able to hold levels above 94 and it has spent most of the Asian session in a 30-pip range around the 93.65 level. Both, the EURJPY and GBPJPY have also retraced from the highs overnight.
Market expectation
Europe's May trade balance is due to be released shortly followed by Canadian CPI at 11AM GMT. Final data this week will be the US housing starts for June.
EURUSD support 1.4050 is key this morning, a weekly close above keeps the pair bullish for next week. Expect the Dollar to closely follow movements of equity markets, for now the day looks bullish with all indices in European opening positively. GBPUSD could remain very volatile. There is plenty of space on either side, initial support 1.6260, resistance 1.6335.
93.65 remains the key level, we can move 30 pips up or down before the weekend closure. A high close indicates further YEN weakness next week, and while trends indicate further $-rise, we must not neglect the danger of a large fall that could take the pair rapidly to 90.00.
Most important events of the day
| 17-Jul | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 1:30 | AU | Export prices | Q2 | % q/q | Low | -16 | -4.6 | |
| 1:30 | AU | Import prices | Q2 | % q/q | Low | -6 | -2.8 | |
| 5:00 | JP | Leading indicator (F) | May | index | High | 76.2 | ||
| 5:00 | JP | Leading indicator (F) | May | index | High | 76.8 | 77 | |
| 8:00 | IT | Industrial Orders (nsa) | May | % y/y | Low | -32.2 | ||
| 8:00 | IT | Industrial Orders (sa) | May | % m/m | Low | 0.4 | 1 | -3.6 |
| 9:00 | EU | Trade balance (sa) | May | EUR bn | High | 0.8 | -0.3 | |
| 9:00 | EU | Trade balance (nsa) | May | EUR bn | High | 2.7 | ||
| 9:00 | IT | Current Account | May | EUR mn | Low | -2736 | ||
| 9:00 | NO | Norges Bank Deputy Governor Qvigstad to give speech before Confindustria (Italian employers federation) upon their visit to Norway | Low | |||||
| 11:00 | US | House Financal Services Committee to hold a hearing on "Industry Perspectives on the Obama Administration's Financial Regulatory Reform Proposals" | Low | |||||
| 11:00 | CA | CPI - BoC core rate | Jun | % y/y | High | 1.9 | 2 | |
| 11:00 | CA | CPI | Jun | % m/m | High | 0.3 | 0.7 | |
| 11:00 | CA | CPI | Jun | %y/y | High | -0.3 | 0.1 | |
| 11:00 | CA | CPI - BoC core rate | Jun | % m/m | High | 0.4 | ||
| 12:00 | EU | ECB Governing Council member Liikanen to speak at a seminar in Finland on media and the financial crisis | Low | |||||
| 12:30 | US | Building Permits | Jun | k | Low | 523 | 518 | |
| 12:30 | US | Housing Starts | Jun | k | High | 530 | 532 | |
| 12:30 | CA | Leading indicator | Jun | % m/m | High | 0.1 | -0.1 | |
| 13:00 | BE | BNB Consumer Sentiment | Jul | Index | Low | -18 | ||
| 15:00 | US | National Economic Council Director Summers to speak on progress in the recovery of the U.S. economy | Low |
