The USD/CAD pair struggled to extend gains beyond 1.27 levels as crude prices in the US recovered from the daily lows. The talks between Iran and major powers were extended today, which increased the possibility of a last minute deal. Thus, crude prices had weakened, which saw the pair test 1.27 levels. So far we have not heard any news of a last minute deal being reached. Thus, Crude prices could turn positive ahead of the weekly supply data in the US. In such a case USD/CAD pair could drop to 1.27 levels. Moreover, the supply data is likely to show additions to inventories, which are already at record highs. However, markets are likely to focus more on Iran deal. A failure to reach a deal could lead to strength in Crude and the Canadian dollar.
In the meantime, a better-than-expected ADP report and the PMI report in the US could see the pair re-test 1.27-1.2730 levels. However, the pair could be sold on rallies in case Crude prices rebound. A positive surprise from the Canadian PMI could also help the CAD.
On the hourly chart, the pair is trading below 1.2694, which is the 23.6% Fib retracement level of 1.2409-1.2782. A failure to rise above 1.27 is could push the pair below the rising trend line support at 1.2662. In such a case, the hourly RSI, currently at 51.00, would also turn bearish, thereby pushing the pair lower to 1.2639-1.26 levels. As mentioned earlier, another attempt at 1.2730 is possible in case of a better-than-expected US data, however, an hourly close above 1.27 is essential for the pair to rise to 1.2782 levels.
GBP/JPY: Could drop to 176.50 on strong US data
The GBP/JPY pair weakened to 177.33 levels during the European session today. The Pound, despite of a better-than-expected manufacturing PMI, fell on election uncertainty. Meanwhile, the Japanese Yen has been relatively stable against the US dollar due to the weakness in the US Treasury yields. Thus, the British Pound appears more vulnerable to a better-than-expected US ADP data and PMI data.
On the other hand, the Japanese Yen could outperform GBP even if the US data prints lower than expected. The 10-year yields in the US are already down to 1.93%. A weak US data could push the yield below 1.9%, thereby pushing the Yen higher.
On the charts, the GBP/JPY pair appears weak after having failed to sustain gains above 5-DMA and 10-DMA located at 177.55 and 177.85 levels. This, coupled with the daily bearish RSI could push the pair lower to 176.50 levels. On the other hand.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.