US retail sales dropped in March, coming in -0.3% against an expectation of 0.1% whilst producer prices also dropped -0.1% versus a forecasted gain of 0.3%. The data failed to dampen the rally in the USD which was buoyed by comments from a couple of Fed presidents who commented that 2-3 more rate hikes are on the cards for this year. EURUSD has struggled to make any gains beyond 1.1400-1.1460 since the start of last year and it’s pulled back from 1.1400 currently trading over a cent lower. The currency pair had formed a charting pattern known as a bearish wedge, the bottom of which was broken today. Initial support is likely to be 1.12-1.1250.
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The Bank of Canada elected to leave interest rates on hold this afternoon, as expected – the Canadian Dollar has been one of the strongest performers in recent weeks, enjoying a bounce in oil prices. GBPCAD is looking vulnerable breaching support at 1.8150-1.8200 which was last tested in March 2015. It may hold for the time being but further GBP weakness can’t be ruled out as the threat of Brexit hangs over the Pound. Next downside target is 1.8000 and onto 1.7750.
Latest FX news by Alastair Sweetman