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Session Recap: Tomorrow in the battle think on me; EUR/USD remains around 1.3600

FXStreet (San Francisco) - The dog days are finished and tomorrow will be the first day of the rest of your life. ECB's Mario Draghi is about to announce new measures, kind of QE in Europe to support economy and to fight deflation. Euro investors are waiting for that battle.

The EUR/USD remained well contained by its last days range in between 1.3585 and 1.3645 while alternating positive and negative days. Jamie Coleman from FXBeat warned market in its last Marketplace report saying that everything is priced in and movements would be not-that-wild in the coming days.

"We traded 1.3597/1.3638 during the NY session with some euro buying on weak ADP data but that was followed by sales after robust service-sector PMI," pointed Coleman.

In the short term, "the line in the sand to the downside stands around 1.3570, with stops having increased below as of lately," comments Valeria Bednarik from FXStreet. "If broken, the downward move may extend down to 1.5320/30 price zone, and once below this last down to 1.3480. Critical resistance stands around 1.3680, 61.8% retracement of this year rally"

The GBP/USD was shaken on the day as the cable traded as high as 1.6770 and as low as 1.6698. Finally, the pair closed 15 pips negative at 1.6735.

On the other hand, the USD/JPY rallied for third day amid US yields which bounced from 2.57% in 10-year notes again. The pair consolidated levels above 102.50 and closed around 102.75.

Main headlines in the American session

US: Trade deficit (Apr) widened to $47.24 billion

May US Markit services PMI final 58.1 vs 58.2 exp

May US ISM non manufacturing PMI 56.3 vs 55.5 exp

BoC keeps interest rate steady at 1% in May

Beige Book: Economic activity expanded in all Districts; but modest to moderate

US stocks climbed to further highs ahead of ECB meeting

How can Mr Draghi surprise? - Nomura

Jens Nordvig and Franklin Wang, FX Strategists at Nomura, note that there are other ways to generate excess liquidity by the ECB.
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