During increased geopolitical and fundamental risks, the safe-haven appeal of the US Dollar and the hawkish rhetoric of the Fed has allowed USD to strengthen against its major counterparts, limiting Canadian Dollar gains.
Last week, the ISM Non-Manufacturing PMI numbers for March will draw plenty of attention. A pickup in service sector activity would support a more aggressive interest rate path for the Fed.
Looking forward for next week it will be a relatively quiet week, but traders will be looking out for a possible resolution in the Russian-Ukraine war. The main economic data that are going to be released are:
On Monday, not much going on except the EU Spanish Unemployment Change and Chinese banks will be closed in observance of Tomb Sweeping Day until Wednesday.
Tuesday, day starts with the Australian Cash Rate and later in the EU a bunch of Services PMI releases from the major members. Later in the day the US will release its ISM Services PMI
On Wednesday, the Canadian Ivey PMI and the US Crude Oil Inventories will be released. Later in the day the all-important US FOMC Meeting Minutes will be released.
Thursday the US Unemployment Claims will be announced and lastly on Friday the Canadian Employment Change and Unemployment rate are set to be released
Major Currencies Performance and Signals
EUR/USD
The Euro suffered punishing losses in the first quarter of 2022. A possible cease fire or deal in the Russian-Ukraine war will make the EUR bounce back. We are Neutral on the EURUSD for this week.
FORECAST: NEUTRAL
Resistance: 1.1150, 1.1200, 1.1250
Support: 1.1000, 1.0950, 1.0900
GBP/USD
The British pound was decreased further last week as the conflict continues and pressures on the government become more apparent. We remain also Neutral on the Cable for this week.
FORECAST: NEUTRAL
Resistance: 1.3150, 1.3200, 1.3250
Support: 1.3100, 1.3050, 1.3000
AUD/USD
The Aussie stayed between the 0.7550 and 0.7450 range for some time. Next week we will have to see the Tuesday’s Australian Cash Rate to gain momentum. For the time being we stay Bullish on the Aussie.
FORECAST: BUY
Resistance: 0.7550, 0.7600, 0.7650
Support: 0.7500, 0.7450, 0.7400
USD/JPY
The USDJPY pair has been advancing for some time and last week as the US Dollar is seen as a safe-haven. For next week we are Neutral looking at the supply and demand dynamics.
FORECAST: NEUTRAL
Resistance: 123.00, 123.50, 124.00
Support: 122.50, 122.00, 121.50
USD/CAD
The Oil sensitive Loonie pair has been down due to the volatile WTI price that affects supply chains. We expect the bearish trend to continue further to the next week.
FORECAST: SELL
Resistance: 1.2550, 1.2600, 1.2650
Support: 1.2500, 1.2450, 1.2400
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