EUR/USD, GBP/USD and USD/CAD amid hawkish Fed forecast
Outlook on EUR/USD, GBP/USD and USD/CAD as US dollar gets boost from hawkish Fed forecast.
EUR/USD comes off near three-week high
EUR/USD is seen coming off Wednesday’s $1.0864 near three-week high as the US dollar got a boost from the Federal Reserve (Fed) raising its terminal rate forecast to allow room for two additional rate hikes.
Ahead of today’s European Central Bank (ECB) expected 25 basis-point (bp) rate hike to 3.5% the cross is retesting its $1.0804 mid-February high, a fall through which could lead to the 8 June high at $1.0787 being revisited, perhaps the next lower $1.0779 early June high as well.
Only a rise above $1.0864 would put the 55-day simple moving average (SMA) at $1.0879 on the map.
GBP/USD drops back from its 14-month high at $1.2699 on hawkish Fed
GBP/USD's rally to a 14-year high at $1.2699 paused on a stronger greenback as any lingering hope of a rate cut this year seems to have gone following Wednesday’s Fed meeting.
A slip through Thursday’s $1.263 low could put the $1.260 region back on the cards which incorporates Monday’s $1.2599 high.
Further minor support sits between the April peak and the early-June high at $1.2546 to $1.2544.
USD/CAD recovers from four-month low as Fed keeps rates unchanged
USD/CAD's slide to its C$1.3273 four-month low stalled as the Fed had its “skip” and kept the Fed funds rate unchanged at 5.00% to 5.25%. This compares to the Bank of Canada (BoC) 22-year high rate at 4.75%.
Major support between the February and June lows at C$1.3273 to C$1.3263 is expected to hold this week and could lead to a minor bounce towards Monday’s high at C$1.3383.
Failure at C$1.3263 would push the C$1.3327 November low to the fore.
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