It’s a busy day ahead on the economic calendar. The EUR, the Pound, the Loonie and the Greenback will all be in action later in the day.
For the EUR
It’s a relatively busy day ahead on the economic calendar. January industrial production figures for the Eurozone are due out later today.
Finalized inflation figures for Germany and Spain are also due out but are unlikely to have a material impact on the EUR.
At the time of writing, the EUR was down by 0.03% to $1.1983.
For the Pound
It’s a relatively busy day ahead on the economic calendar. Key stats include industrial and manufacturing production figures and 3-month rolling GDP numbers for January.
Trade data is also due out but will likely have a muted impact on the Pound.
At the time of writing, the Pound was down by 0.01% to $1.3990.
For The USD
It’s a relatively busy day ahead on the economic calendar. Wholesale inflation and consumer sentiment figures are due out later today.
Expect both sets of numbers to provide the Dollar and the broader markets with direction.
Away from the economic calendar, FOMC member chatter and news from Capitol Hill will also need monitoring.
On Thursday, the Dollar Spot Index slid by 0.44% to 91.420.
For the Loonie
It’s a relatively busy day on the economic calendar. Employment and wholesale sales figures are due out late in the day.
Expect the employment numbers to have the greatest impact.
Ultimately, however, market risk sentiment will remain the key driver.
At the time of writing, the Loonie was up by 0.01% to C$1.2532 against the U.S Dollar.
GBP/USD did not manage to settle above the major resistance level at 1.4000.
GBP/USD faced resistance at 1.4000 and pulled back below the support at 1.3980. If GBP/USD manages to settle below this support level, it will head towards the next support at 1.3950.
In case GBP/USD declines below the support at 1.3950, it will head towards the next support level which is located near the 20 EMA at 1.3925.
On the upside, GBP/USD needs to settle above the resistance at 1.4000 to continue its upside move. A move above this level will be a welcome development for GBP/USD bulls as it will signal that GBP/USD is leaving the 1.3900 – 1.4000 range and is ready to develop additional upside momentum.
If GBP/USD settles above 1.4000, it will head towards the next resistance at 1.4025. A successful test of this level will open the way to the test of the resistance at 1.4050. In case GBP/USD gets above the resistance at 1.4050, it will move towards the next resistance at 1.4080.
The USD/CAD pair witnessed some heavy selling on Thursday and tumbled to two-week lows amid a broad-based US dollar weakness. The Canadian dollar remained well supported by the fact that the Bank of Canada on Wednesday hinted to taper its asset purchases as policymakers gain confidence in the strength of the economic recovery. Apart from this, a modest uptick in crude oil prices provided an additional boost to the commodity-linked loonie. In fact, WTI futures climbed 2.5% on Thursday amid optimism over the extension of production cuts by major oil producers and hopes for a recovery in the global fuel demand.
The pair was further pressured by some follow-through US dollar selling. Wednesday’s mixed US consumer inflation figures eased market concerns about runaway inflation. Apart from this, the successful conclusion of auctions for ten-year and 30-year US government bonds boosted investors sentiment, which, in turn, undermined the safe-haven greenback. The global risk sentiment got an additional boost after US President Joe Biden signed a much-awaited $1.9 trillion stimulus bill into law. The combination of factors dragged the pair lower for the third consecutive session and confirmed a bearish break below a two-week-old trading range.
From a technical perspective, the overnight bearish break through a short-term trading range supports prospects for a further decline. However, the emergence of some dip-buying ahead of the key 1.2500 psychological mark warrants some caution for aggressive bearish traders. Hence, it will be prudent to wait for sustained weakness below the mentioned level before positioning for any further depreciating move back towards multi-year lows, around the 1.2470-65 region. Some follow-through selling will set the stage for an extension of the recent/well-established downward trajectory witnessed over the past year or so.
On the flip side, the trading range support breakpoint, around the 1.2575 region now seems to act as immediate resistance. This is followed by the 1.2600 mark and the overnight swing highs, around the 1.2625 region. A convincing break through the mentioned barriers will negate any near-term bearish bias and trigger a short-covering move. The pair might then aim to reclaim the 1.2700 mark before eventually darting to challenge the 1.2740-50 heavy supply zone. The momentum could further get extended towards the 1.2800 mark, which coincides with a near three-month-old descending trend-line and should act as a key pivotal point for short-term traders.
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