North America In The Spotlight On Friday

For currency traders, North America will generate much of the market-moving headlines Friday as Canadian data and US policy speakers set the tone ahead of the weekend.

A relatively light European session will begin with a pair of German reports scheduled for 06:00 GMT. Germany’s producer price index (PPI) for the month of April is forecast to rise 0.3%, which translates into a year-over-year growth rate of 1.8%. Meanwhile, German wholesale prices are forecast to rise 0.2% month-on-month.

The European Commission’s statistical agency will report on the overall trade balance at 09:00 GMT. The budget surplus for Brussels is forecast to fall slightly to €20.7 billion in March from €21 billion on a seasonally adjusted basis.

Shifting gears to North America, the government of Canada will release two high-profile reports that will be closely monitored by loonie traders. At 12:30 GMT, Statistics Canada will report on retail sales and consumer inflation. The retail sales report is expected to show monthly growth of 0.3% for March. Meanwhile, Canada’s consumer price index (CPI) is expected to hold steady at 2.3% year-over-year during April.

For the United States, three Federal Open Market Committee (FOMC) members will deliver speeches on Friday, including Loretta Mester, Robert Kaplan and Lael Brainard. The FOMC policy-setting board is widely expected to raise interest rates next month when it meets in Washington.

USD/CAD

The Canadian dollar’s recovery proved to be short-lived Thursday, as the US greenback strengthened against a basket of its peers. USD/CAD jumped more than 60 pips to trade at 1.2832, where it was last seen hovering. The bulls are eyeing a re-test of the 15 May high near 1.2920. A sustained push above this level could generate support for a bigger rebound toward the psychological 1.3000.

EUR/USD

Europe’s common currency traded within a narrow range against the dollar on Thursday, with prices hovering near 1.1800 USD. At the time of writing, EUR/USD was trading at 1.1805, gaining slightly from the previous close. Technical levels to watch include interim resistance levels at 1.1835, which corresponds with the 17 May high. On the opposite side of the spectrum, support is located at the Thursday low of 1.1775.

GBP/USD

Cable traded within a choppy range on Thursday, with prices reaching a high near 1.3570 before plunging back below the 1.3490 handle. At the time of writing, GBP/USD was trading steadily at 1.3513. With the bears in control, the pair could be eyeing a bigger reversal back down toward the 1.3400 handle. Downward momentum is building, which means traders should look for a breach of Thursday’s low.