Weekly technical outlook – EUR/USD, GBP/USD, USD/CAD

ECB policy meeting --> EUR/USD

As the Easter break approaches, the European Central Bank (ECB) finds itself in the middle of a monetary-policy egg hunt, trying to deliver clarity while dodging surprises from across the Atlantic. The US administration’s decision to pause tariffs on high-tech goods briefly cheered markets, but Washington warned it’s just a temporary detour before a new round of tweaked curbs. 

Against that backdrop, the ECB is expected to cut rates by 25bps to 2.25% on Thursday, with futures markets already betting on a follow-up move in June. But ECB President Christine Lagarde’s emphasis on a flexible policy path is keeping traders guessing about how low rates can go – will they bottom at 2.0% or be cut even lower?

Technically, EURUSD is testing the critical 1.1375 ceiling. A breakout above this level could clear the way toward the 2022 double top near 1.1480, followed by the next target at 1.1660. However, if the ECB sounds overly dovish and hints at a neutral rate below 2.0%, the pair could fall back below 1.1300. Key supports lie at 1.1200 and then 1.1000–1.1050.

BoC policy meeting --> USD/CAD

The Bank of Canada (Boc) will announce its policy decision a day earlier on Wednesday, and while forecasts point to steady rates, futures markets suggest that a 25bps rate cut to 2.5% could be a toss coin. Tuesday’s CPI inflation figures may provide some direction, with analysts forecasting a monthly slowdown to 0.6% m/m from 1.1% previously and a steady annual increase of 2.6%. The core measures, however, may tick up to 3.0%, to stand just around the upper band of the BoC’s target of 1-3%.

Canada was largely spared from the reciprocal tariffs thanks to the United States-Mexico-Canada Agreement (USMCA) – a free trade agreement renegotiated and signed by the Trump administration in 2020, but it keeps facing curbs in non-USMCA products, such as energy and potash exports.  

China’s GDP growth figures, US retail sales, and a speech by Fed Chair Jay Powell could fuel more volatility to USDCAD on Wednesday. The pair has slipped below the 61.8% Fibonacci retracement of the 2024–2025 uptrend, suggesting the bears are gaining ground. Immediate support lies at 1.3815, followed by 1.3720–1.3740. A bounce above 1.3900 would be needed to relieve downside pressure, but momentum indicators still favor further weakness.

UK Jobs & CPI data --> GBP/USD

The UK calendar will be busy on Tuesday and Wednesday too, delivering employment and CPI inflation data respectively, as GBPUSD is approaching April’s peak of 1.3200 after last week’s swift upturn from 1.2740.

Investors are certain that the Bank of England will slash rates by 25bps to 4.25% on May 8, so any surprises will need to be big to shake GBPUSD. UK-US relations have not generated many headlines lately, but the British government is still exposed to the US tariffs on steel, aluminum and cars like its European counterparts, which could still be a blow to UK businesses.

In any case, GBPUSD must overcome the 1.3300 area, where the long-term resistance line from 2021 is located, to access the 1.3375-1.3430 crucial territory. The technical picture endorses more increases ahead.