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It’s a busy day ahead on the economic calendar, with EUR, the Loonie, the Pound, and the Greenback in focus.
For the EUR
It’s a particularly busy day ahead on the economic calendar. Prelim private sector PMI figures for France, Germany, and the Eurozone are due out later today.
Expect plenty of influence from the February numbers. While there’s concern over the services sector, the manufacturing sector will need to continue to perform.
Any weaker manufacturing numbers and the EUR will likely come under pressure. New orders and sentiment towards pricing will likely be key areas of focus.
At the time of writing, the EUR was up by 0.02% to $1.2095.
For the Pound
It’s a busy day ahead on the economic calendar. January retail sales figures are due out along with prelim private sector PMI numbers for February.
The retail sales and services PMI figures will likely be the key drivers.
CBI industrial trend orders for February are also due out but will likely have a muted impact on the Pound.
At the time of writing, the Pound was down by 0.04% to $1.3970.
For the USD
It’s another busy day ahead on the economic calendar. Key stats include February’s prelim private sector PMI numbers and housing sector data.
The services PMI will be the main area of interest on the day.
At the time of writing, the Dollar Spot Index was down by 0.07% to 90.532.
For the Loonie
It’s a relatively busy day on the economic data front. Retail sales figures for December are due out later today.
With economic data on the lighter side in the week, we can expect plenty of Loonie sensitivity to the numbers.
From elsewhere, private sector PMI numbers will also influence crude oil prices and ultimately the Loonie.
At the time of writing, the Loonie was down by 0.01% to C$1.2680 against the U.S Dollar.
24-hour view: “We highlighted yesterday that ‘downward pressure has eased and GBP is unlikely to weaken further’ and we were of the view that GBP ‘is likely to consolidate and trade between 1.3830 and 1.3905’. However, GBP lifted off and blew past 1.3905 as it surged to an overnight high of 1.3986. While the rapid rise is overbought, GBP could edge above 1.4000 first before a pullback can be expected. For today, the next resistance at 1.4050 is unlikely to come into the picture. Support is at 1.3945 followed by 1.3920.”
Next 1-3 weeks: “We have held a positive view in GBP for more than a week now. After GBP retreated sharply from 1.3955, we highlighted on Wednesday (17 Feb, spot at 1.3885) that ‘upward momentum has been dented and the odds for GBP to extend its gains to the next resistance at 1.4000 are not high’. We added, ‘unless GBP can move and stay above 1.3925 within these 1 to 2 days, a break of the ‘strong support’ at 1.3820 would indicate that the current GBP strength has run its course’. GBP subsequently dropped to 1.3830 but yesterday (18 Feb), it took off and surged to 1.3986. The strong boost in momentum suggests GBP could crack 1.4000 and head towards 1.4050. On the downside, the ‘strong support’ level has moved higher to 1.3870 from 1.3820. A break of the ‘strong support’ would indicate that the current GBP strength has run its course.”
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. Momentum shifted to the downside on Wednesday with the formation of a closing price reversal top.
A trade through 106.224 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 104.410.
The USD/JPY is currently trading on the strong side of longer-term retracement zone at 104.821 to 105.347. This zone is potential support.
The short-term range is 104.410 to 106.224. Its retracement zone at 105.317 to 105.103 is the next potential downside target area.
The two zones form a potential support cluster at 105.347 to 105.317. Since the main trend is up, buyers could come in on a test of this area.
Daily Swing Chart Technical Forecast
The early downside momentum suggests sellers are going to take a run at 105.347 to 105.317. Watch for buyers on the first test of this support cluster. If successful, this could trigger an intraday short-covering rally.
If 105.317 fails as support then look for the selling to possibly extend into the short-term Fibonacci level at 105.103.
The USD/CAD pair held on to its modest intraday gains through the early European session, albeit has retreated around 20-25 pips from daily tops. The pair was last seen trading just below the 1.2700 mark, up around 0.10% for the day.
The pair managed to regain positive traction on the last trading day of the week and recovered the previous day’s losses, though lacked any strong follow-through buying. A modest pullback in crude oil prices undermined demand for the commodity-linked loonie and was seen as a key factor that provided a modest lift to the USD/CAD pair.
It will now be interesting to see if bulls can capitalize on the move of the USD/CAD pair continues with its struggle to break through 50-day SMA hurdle near the 1.2745 region. Market participants now look forward to the release of Canadian Retail Sales data for some impetus later during the early North American session.
Meanwhile, the US economic docket highlights the release of flash PMI prints (Manufacturing and Services) and Existing Home Sales data. Apart from this, the US bond yields might influence the USD price dynamics and produce some trading opportunities around the USD/CAD pair.
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