USD/CAD Rate Outlook Mired by Failed Attempt to Test 2018-High

FX TALKING POINTS:

  • USD/CAD Rate Outlook Mired by Failed Attempt to Test 2018-High (1.3125). U.S. Consumer Price Index (CPI) on Tap.
  • EUR/USD Preserves Bearish Sequence, Relative Strength Index (RSI) Sits in Oversold Territory Ahead of European Central Bank (ECB) Rhetoric.

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USD/CAD struggles to keep a allege from progressing this month, with a span during risk for serve waste following a unsuccessful try to exam a 2018-high (1.3125). Meanwhile, EUR/USD extends a bearish method from progressing this year, with a Relative Strength Index (RSI) still flashing an impassioned reading as a oscillator binds in oversold territory.

USD/CAD RATE OUTLOOK MIRED BY FAILED ATTEMPT TO TEST 2018-HIGH (1.3125)

Image of USDCAD daily performance

The near-term allege in USD/CAD might continue to uncover following a unsuccessful try to exam a 2018-high (1.3125), nonetheless uninformed updates to a U.S. Consumer Price Index (CPI) might keep a span afloat as both a title and core reading are expected to collect adult in April.

Even nonetheless Fed Fund Futures still uncover singular bets for 4 Fed rate-hikes in 2018, signs of worsening cost pressures might boost a seductiveness of a greenback as it puts vigour on a Federal Open Market Committee (FOMC) to exercise a some-more assertive proceed in normalizing financial policy. A collection of certain developments might extent a downside risk for USD/CAD, with a span during risk of confronting range-bound conditions over a residue of a week as Chairman Jerome Powell and Co. oath to exercise aloft borrowing-costs over a entrance months.

However, like a below-forecast imitation for a Producer Price Index (PPI), a gloomy consumer cost news might hint adverse conditions for a U.S. dollar,and USD/CAD might continue to prune a allege from a prior month as marketplace participants scale behind bets for an extended hiking-cycle.

USD/CAD DAILY CHART

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  • Lack of movement to pull behind above a 1.2980 (61.8% retracement) to 1.3030 (50% expansion) segment caps a near-term opinion for USD/CAD, with a span during risk for serve waste as a Relative Strength Index (RSI) appears to have flopped brazen of overbought territory.
  • Need to see a shutting cost subsequent 1.2830 (38.2% retracement) to open adult a broader range, with a subsequent area of seductiveness entrance in around 1.2720 (38.2% retracement) to 1.2770 (38.2% expansion) followed by a 1.2620 (50% retracement) region.

For some-more in-depth analysis, check out theQ2 Forecast for a U.S. Dollar

EUR/USD PRESERVES BEARISH SEQUENCE, RELATIVE STRENGTH INDEX (RSI) SITS IN OVERSOLD TERRITORY AHEAD OF EUROPEAN CENTRAL BANK (ECB) RHETORIC

Image of EURUSD daily performance

Fresh tongue entrance out of a European Central Bank (ECB) might fuel a new array of reduce highs lows in EUR/USD should President Mario Draghi hang to a same tune.

Signs of ongoing tardy in a euro-area economy might inspire President Draghi to broach a dovish debate after this week as a Governing Council struggles to grasp a one and usually charge for cost stability. The executive bank conduct might mostly stress a wait-and-see proceed as ‘measures of underlying acceleration sojourn resigned and have nonetheless to uncover convincing signs of a postulated ceiling trend,’ with a Euro during risk of confronting serve waste if a debate shows a larger eagerness to lift a stream process into a second-half of 2018.

However, with a quantitative easing (QE) module set to end in September, President Draghi might start to change a brazen superintendence as ‘the underlying strength of a euro area economy continues to support a certainty that acceleration will intersect towards a acceleration aim of below, nonetheless tighten to, 2% over a middle term.

In turn, a collection of less-dovish comments might hint a bullish greeting in Euro, nonetheless new cost movement in EUR/USD keeps a near-term opinion slanted to a downside generally as a Relative Strength Index (RSI) sits in oversold territory.

EUR/USD DAILY CHART

Image of EURUSD daily chart

  • Downside targets sojourn on a radar for EUR/USD as it extends a bearish method from progressing this week, with a break/close subsequent a 1.1790 (23.6% retracement) to 1.1810 (61.8% retracement) segment lifting a risk for a pierce behind towards 1.1670 (78.6% expansion) to 1.1680 (50% retracement).
  • May see euro-dollar continue to work a proceed towards a November-low (1.1554) as both cost and a RSI safety a bearish formations from progressing this year, nonetheless a movement indicator might foreshadow a near-term miscarry in a sell rate once a oscillator climbs above 30 and flashes a text buy signal.

For some-more in-depth analysis, check out a Q2 Forecast for EUR/USD

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— Written by David Song, Currency Analyst

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