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Currency Feed – New York Close Report – Tuesday 21st March

EUR/USD – Current Price $1.0801 (+$0.0061)

EUR/USD rallied to a fresh seven-week high this afternoon at $1.0819, just short of the 2017 high set on February 2nd at $1.0828. The Euro has found some upside following the French Presidential TV debate overnight in which Emmanuel Macron appears to have emerged as the victor – a recent IFOP poll shows he has gained 0.5 in the first round of voting to 25.5% while Le Pen was steady at 26.0%. We have also seen a sizeable decline in the US Dollar today amid a fade of the so-called Trump ‘reflation trade’. Investors are growing increasingly concerned that House Republicans will struggle to find enough votes to pass the Healthcare bill on Thursday and this could delay any action on tax reform and fiscal spending. From a technical view, the aforementioned February 2nd high at $1.0828 may offer some resistance ahead of the December 8th high at $1.0872. On the downside, the earlier low at $1.0717 and Thursday’s low at 1.0704 are in focus.

GBP/USD – Current Price $1.2477 (+$0.0122)

GBP/USD has rallied today to its highest level since February 24th, reaching a daily peak of $1.2494. Gains this morning followed stronger than expected UK inflation data with headline CPI moving above the BoE’s target to +2.3% (f/c. +2.1%) from +1.8% prior. The pair then found further upside this afternoon as the Dollar slumped across the board amid a fade of the so-called Trump ‘reflation trade’. Investors are growing increasingly concerned that House Republicans will struggle to find enough votes to pass the Healthcare bill on Thursday and this could delay any action on tax reform and fiscal spending. From a technical view, we look for resistance at the February 28th high at 1.2470 and February 9th high at $1.2582. On the downside, yesterday’s high at $1.2435 may offer some support ahead of yesterday’s low at $1.2333.

USD/JPY – Current Price ¥111.84 (-¥0.71)

USD/JPY sunk to a daily low of ¥111.67 this afternoon amid a broad Dollar sell off, matching the February 28th low and just above the 2017 low from February 7th at ¥111.57. Investors have faded the so-called Trump reflation trade today as they grow concerned that Republicans will struggle to find enough votes to pass the Healthcare bill and this could delay any action on tax reform and fiscal spending. The Yen has also benefitted from safe-have flows as US and European stocks turned lower this afternoon, led by a nose-dive in financials. The 2017 low at ¥111.57 forms our first support level ahead of the November 28th low at ¥111.32. On the upside, the overnight/yesterday’s highs at ¥112.89/89 may offer resistance ahead of the March 17th/16th highs at ¥113.49/54.

GBP/EUR – Current Price €1.1548 (+€0.0043)

GBP/EUR rallied to its highest level since March 7th today as Sterling rallied across the board after stronger than expected UK inflation data with headline CPI moving above the BoE’s target to +2.3% (f/c. +2.1%) from +1.8% prior. Gains may have been capped however by gains in the Euro after the French Presidential TV debate overnight in which Emmanuel Macron appears to have emerged as the victor – a recent IFOP poll shows he has gained 0.5 in the first round of voting to 25.5% while Le Pen was steady at 26.0%. From a technical view, Friday’s low at €1.1440 may offer support ahead of last Thursday’s low at €1.1414. On the upside, the earlier high at €1.1561 and March 6th high at €1.1598 are in focus.

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