EUR/USD and EUR/GBP rise ahead of German ZEW while USD/CAD holds
Outlook on EUR/USD, EUR/GBP and USD/CAD ahead of German economic sentiment and FOMC meeting on Wednesday.
EUR/USD on track for its fourth straight day of gains
EUR/USD’s last few days’ advance has reached the February-to-March resistance line and 55-day simple moving average (SMA) at $1.0722 to $1.0725 which it is in the process of breaking through with last week’s high at $1.0760 representing the next upside target as the US dollar depreciates amid recent risk-off sentiment diminishing ahead of Wednesday’s FOMC meeting.
A rise above $1.0740 would engage the $1.0804 mid-February high, an advance above which would likely have medium-term bullish implications.
Slips should find support around the early March highs at $1.0694 to $1.0691, below which sits further support at the $1.0656 mid-February low.
EUR/GBP recovers ahead of German ZEW
EUR/GBP managed to hold its two-week descent as the European banking crisis seems to at least short-term abate and as market participants look to the German ZEW economic sentiment which is forecast to drop to 14.9 in March versus 28.1 in February.
EUR/GBP reversed slightly above its £0.8722 to £0.8719 support zone, consisting of the January and last week’s lows, and is fast approaching the March resistance line at $0.8772, a rise above which would bring the £0.8755 late February low and at Monday’s £0.8769 intraday high to the fore.
Were an unexpected bearish reversal to take the currency pair to below the £0.8722 to £0.8719 support area, the 200-day simple moving average (SMA) at £0.8686 would be in focus.
USD/CAD revisits mid-March low
USD/CAD continues to hover above its mid-March low at C$1.3652 amid falling oil prices and a weaker greenback ahead of Wednesday’s FOMC meeting in which the Federal Reserve (Fed) is expected to hike rates by 25-basis points to 4.75% to 5.00%.
A slip through C$1.3652 and the 38.2% Fibonacci retracement of the February-to-March advance at C$1.3634 would put the 50% retracement and the early March low at C$1.3563 to C$1.3556 on the map.
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