Forex

FXCM's USDOLLAR basket finds itself near the 12,750 level, which is regarded as an important level of support.

The Bank of Canada kept its overnight rate at 4.5%, in line with expectations. It was the first major central to pause its hiking cycle. In its rate statement the BoC said that the “Governing Council continues to assess whether monetary policy is sufficiently restrictive to relieve price pressures and remains prepared to raise the policy rate further if needed to return inflation to the 2% target.”

Headline CPI came in lower-than-expected printing at 5% y/y (5.2% y/y - forecast) and 0.1% m/m (0.3% m/m – forecast). Core CPI, which strips out volatile items such as food and energy, came in at 5.6% on an annual basis and 0.4% m/m. The numbers are still above the Fed’s 2% target, but these are signs of moderating inflation

The pair made a strong start to the week, but trades with caution today, as markets brace for the US inflation update and the FOMC minutes

After a poor start to the week, the pair rises again today, as markets await Wednesday’s CPI Inflation update from the United States

The pair dropped on Tuesday after Australia’s central bank paused its rate-hike cycle and remains downbeat amidst broader risk aversion, ahead of the US jobs report

The USDOLLAR daily chart is trading in its bearish channel between it lower blue and red bands. Its RSI is trading below 50. The longer it maintains on the bearish side of 50, the more pressure will be applied to the greenback. Data out this week has pointed to an economic softening.

FXCM’s USDOLLAR basket appears to be charting a head and shoulders top. This pattern is a reversal in trend from uptrend to downtrend. The pattern is yet to complete, and we note the pattern completion gap i.e., the price to neckline gap. However, the weekly RSI is below 50 (green rectangle), which suggests a bearish momentum is present. The longer the indicator maintains below 50, the more pressure will be…

The pair runs another profitable week, supported by the recent ECB-Fed policy divergence, but trades with caution today as inflation figures and other data loom

The pair pauses its four week-losing streak and rebounds from the recent slump, as fears over the banking sector ease

The pair is constructive after the US Fed was constrained to a conservative stance last week due to the banking turmoil and the BoE was forced to another increase due to the reacceleration in inflationary pressures