Talking Points:
– GBP/USD Struggles as BoE’s Haldane Sees Risk for Rate Cut/Hike.
– USD/CAD 1.2800 Resistance in Focus Ahead of Canada CPI, Retail Sales.
– USDOLLAR Retains Bullish Formation Post-FOMC; Inflation to Contract for Second Month.
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GBP/USD
Chart – Created Using FXCM Marketscope 2.0
GBP/USD under pressure as Bank of England’s (BoE) Andy Haldane argues that the central bank could cut or hike the U.K. benchmark interest rate; bearish sentiment surrounding the sterling may continue to take shape ahead of the U.K. election in May as the BoE remains in no rush to normalize monetary policy.
Nevertheless, string of closes above 1.4700-10 (78.6% expansion) raises the risk for a larger rebound in GBP/USD as the RSI continues to come off of oversold territory.
DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD since February 26, with the ratio now climbing to +2.29.
USD/CAD
USD/CAD may continue to face range-bound prices as the bearish RSI momentum remains intact; need a topside break in the oscillator accompanied by a close above the 1.2800 resistance zone to favor a continuation of the bullish trend.
A slowdown in Canada’s core Consumer Price Index (CPI) along with another decline in Retail Sales may act as the fundamental catalyst to spark a further advance in USD/CAD should the data prints fuel bets for another Bank of Canada (BoC) rate cut.
Close above the 1.2800 handle should expose the next topside area of interest coming in around 1.2940 (78.6% retracement/50% retracement).
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Read More:
Price & Time: Euro Correction Already Over?
GBPCAD at Support- Scalps Target 1.8785 Ahead of Key Data
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
12104.36
12110.98
11947.84
1.07
212.03%
Chart – Created Using FXCM Marketscope 2.0
Despite bearish reaction to the Federal Open Market Committee (FOMC) interest rate decision, the near-term outlook for the Dow Jones-FXCM U.S. Dollar index remains supportive as price and the RSI retains the bullish formations.
The U.S. Consumer Price Index (CPI) due out next week may produce headwinds for the greenback as the headline reading is expected to contract an annualized 0.1% for the second consecutive month in February.
Should the USDOLLAR carve out a higher-low going into the end of March, may pave the way for a more meaningful assault at 12,176 (78.6% retracement).
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Release
GMT
Expected
Actual
Initial Jobless Claims (MAR 14)
12:30
293K
291K
Continuing Claims (MAR 7)
12:30
2400K
2417K
Philadelphia Fed Business Optimism Survey (MAR)
14:00
7.0
5.0
Leading Index (FEB)
14:00
0.2%
0.2%
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Source: Daily fx