In today’s forex forecast, we look at EUR/GBP, USD/CAD and EUR/CAD with Joshua Mahony, Market Analyst for IG Index.
Canada: Expansionary path for the economy.
Canada remains in focus, notes Mahony, as he highlights the two key risks for USD/CAD ahead – the retail sales and CPI numbers.
Mahony also believes the election of the new Prime Minister in the country adds to a positive outlook for the economy.
EUR/GBP outlook into ECB decision
Mahony sees a clear resistance for EUR/GBP at 0.75. He expects this resistance to hold for a downside move towards 0.70 and even 0.65 over the long term, but warns of the ECB decision risk today. While breaking above 0.75 will see the cross head towards 0.7764 levels.
ECB’s options
Mahony lists the 4 key options with ECB:
ECB extending QE beyond September 2016
Increase above EUR 60bn monthly purchases
Broaden range of assets held
Cure deposit rate again
USD/CAD ahead of retail sales and cpi
On the technical outlook for USD/CAD, Mahony believes that the inverse head and shoulder pattern in the charts points for a bullish view on the cross.
EUR/CAD: Key levels
Looking at the technical charts for EUR/CAD, Mahony highlights the key Fibonacci support at 1.4589, and notes the pair remains in a falling wedge
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