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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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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