EUR/USD, GBP/USD rally on weaker greenback while USD/CAD slips
Outlook on EUR/USD, GBP/USD and USD/CAD as US dollar takes a hit due to softer US CPI data and recession warnings.
EUR/USD trades in two-month highs on weaker greenback
EUR/USD’s advance from Monday’s $1.0832 low gained upside momentum on a weaker-than-expected US consumer price index (CPI) reading and as the Federal Reserve (Fed) projected a 'mild recession', both pushing the USD dollar down.
The weaker greenback benefitted the EUR/USD cross which rallied to a two-month high and reached the minor psychological $1.10 mark above which beckons the $1.1033 February peak.
Support is now seen at the $1.0973 early-April high and then around the $1.0929 late-March high.
GBP/USD heads back up towards its recent $1.2525 high
GBP/USD recovery rally from Monday’s $1.2345 low gained traction as the US dollar sold off after weaker-than-expected CPI data and the US Fed warning of a mild recession later in the year due to the recent banking turmoil.
The cross now grapples with the minor psychological $1.25 mark, above which lies the early-April high at $1.2525, a rise above which would target the May 2022 peak at $1.2667.
Minor support can be spotted between the December and January highs at $1.2448 to $1.2446, above the March-to-April support line at $1.242. Further down sits minor support at Tuesday’s $1.2386 low ahead of Monday’s $1.2345 trough.
USD/CAD resumes its descent as central bank keeps rates at 4.5%
USD/CAD revisited its early-April low at C$1.3407 as the Bank of Canada (BoC) left its interest rates unchanged for a second straight month at 4.5% in view of falling inflation and because of the stress in the global banking system.
Once the recent low at C$1.3407 has been slipped through, the early-December low at C$1.3386 will be in focus, and medium-term the February trough at C$1.3263 as well.
The medium-term bearish view will remain valid as long as no bullish reversal takes the cross above Monday’s high at C$1.3553.
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