USDCAD TECHS: Bears Remain In The Driver’s Seat
Mar-30 07:11
- RES 4: 1.3898 High Oct 14
- RES 3: 1.3805/3862 High Mar 24 / 10 and the bull trigger
- RES 2: 1.3745 High Mar 27
- RES 1: 1.3663 20-day EMA
- PRICE: 1.3546 @ 08:10 BST Mar 30
- SUP 1: 1.3517/15 100-dma / Low Feb 22
- SUP 2: 1.3491 61.8% retracement of the Feb 2 - Mar 10 rally
- SUP 3: 1.3442 Low Feb 20 / 21
- SUP 4: 1.3404 76.4% retracement of the Feb 2 - Mar 10 rally
The current bear cycle in USDCAD remains in play and the pair is trading lower again today. This week’s bearish extension has resulted in a break of the 50-day EMA and 1.3562, the 50% retracement for the Feb 2 - Mar 10 rally. The move lower signals scope for a continuation towards 1.3515, the Feb 22 low and 1.3491, the 61.8% retracement. On the upside, initial resistance is seen at 1.3663, the 20-day EMA.
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EUROPEAN DATA: Inflation in focus
Feb-28 07:08
- Flash inflation data for February is in focus this morning with French inflation data due at 7:45GMT / 8:45CET and Spanish data due at 8:00GMT / 9:00CET. These data come ahead of German state / national prints tomorrow and the Italian / Eurozone prints on Thursday.
- These data will be crucial for the ECB's communication at its March meeting. The bar to anything other than a 50bp hike in March is huge at this stage, but the communication surrounding future meetings is still going to be very data driven, with inflation data being the most important datapoint in Europe in coming months.
- As we have already noted in previous bullets this morning, market pricing is now consistent with a 50bp hike in March and then one 50bp and two 25bp in the May/June/July meetings and then roughly a 50% probability of a further hike in September or later.
- This morning's data brings two way risks to this pricing but we also note that as this is flash data we don't get huge amounts of detail in the breakdown. For the French data we don't receive a core print, while for the Spanish data the only core inflation print we receive is of the national CPI, not the HICP, which can sometimes be different.
- All will be closely watched, however, and likely set the day for the tone for the European trading session.
SWEDEN: Disappointing GDP data, but little impact for Riksbank policy
Feb-28 07:04
- Looks like there are downward revisions to Q3 Q/Q GDP in Sweden which make that -0.9%Q/Q print look even worse than at first glance.
- EURSEK is back to where it was 20 minutes before the data. The market cares a lot more about inflation than activity data at the moment and this data is a bit too backwards looking to really have a big impact on Riksbank policy.
DUTCH AUCTION PREVIEW: 0% Jan-38 DSL
Feb-28 07:01
On offer today:
- E1.5-2.5bln of the 0% Jan-38 DSL (ISIN: NL0015000B11)
Timing: Results will be available shortly after the auction closes at 0900 GMT / 1000 CET.
See PDF for full auction preview:
