The EUR/USD continued its advance from yesterday, reaching a high of 1.09 following the opening of European markets. The Euro gained momentum against the USD as news from the Bank of Canada’s rate decision started to spread throughout the market.
Yesterday’s Bank of Canada rate decision appears to have sparked a renewed sense of risk in the market. Investors are hopeful that other major central banks will follow suit, as seen with yesterday’s announcement by The BoC. However, ECB policymakers remain very hawkish on rates and made comments expressing this sentiment yesterday.
DXY AND EUR/USD Technical Outlook
At the moment, the Dollar Index (DXY) is in a range of prices, similar to what we see during the holiday season. Today’s GDP report from the US may provide an important catalyst for a breakout.
From a technical perspective, price action remains scattered on EUR/USD as we remain within the ascending channel. Resistance is located around the 1.0940 area, but breakout looks unlikely at this time.
The 100 and 200-day MAs are about to cross into positive territory in another nod to the current uptrend. The only thing bulls need to worry about at this point is that both the daily and weekly timeframe remain overbought, so it might be wise to keep that in mind.
Pakistani rupee plummets
Thursday’s 9.6% drop in the Pakistani rupee against the US dollar is likely to persuade the International Monetary Fund (IMF) to resume lending Pakistan money, according to bank data. The currency has significantly weakened over recent weeks amid concerns about economic growth and a mounting foreign debt load.
Yesterday, the foreign exchange market removed a cap on the value of the currency, which was one of the demands made by IMF officials in order to help South Asia’s cash-strapped economy.