In this article, we have covered the highlights of global market news about the USD/CAD, EUR/USD, AUD/USD and USD/JPY.
USD/CAD falls below 1.3500 for the first time since February 21.
After a slight intraday recovery to the 1.3535 regions on Monday, the USD/CAD pair drew new sellers and declined to a fresh low since February 21 during the first part of the European session. Now, the pair is trading close below the psychological level of 1.3500 and is susceptible below the 100-day Simple Moving Average (SMA).
An unexpected production reduction by OPEC+ caused the price of crude oil to spike higher on the first day of the new week, which supports the commodity-linked Loonie and weighs down the USD/CAD pair. It is important to remember that major oil producers announced an additional production reduction of around 1.16 million bpd on Sunday before a fictitious meeting of the OPEC+ ministerial panel, which caused the price of the dark liquid to spike by over 6%.
On the other hand, the US Dollar gives up most of its intraday gains and further puts downward pressure on the USD/CAD pair. The demand for conventional safe-haven currencies, such as the Dollar, is reduced by an overall upbeat risk tone. Nonetheless, market confidence will likely be fleeting due to worries about a deepening global economic slowdown. Concerns arose when statistics from Asia on Friday revealed that China’s growth stagnated in March while Japan’s industrial activity shrank during the same month.
EUR/USD: Bulls are likely to welcome the pair finishing the week around 1.0850/1.0900 – ING
The EUR/USD was predicted to breach 1.10 this week by ING economists. This is still possible, but the unexpected OPEC+ oil output decrease saves dollars.
Move to 1.10 is postponed.
We predicted that the EUR/USD would break above 1.10 this week. Still, given the lack of Euro-specific factors this week and the OPEC+ surprise cut’s asymmetrically bullish effect on the US Dollar, such a prediction probably needs some dismal US economic news. While not strictly our base scenario, EUR/USD bulls would cheer on the pair closing the week in the 1.0850/1.0900.
Due to strong US data and aggressive Fed rhetoric, the pair may challenge the 1.0700 and 1.0600 levels.
AUD/USD: The Australian will gain if the RBA highlights the likelihood of more rate rises, according to Commerzbank.
On Tuesday, the Reserve Bank of Australia (RBA) will meet monthly. According to Commerzbank analysts, the main issues are whether the RBA will stop raising interest rates and how it sees them changing in the near future.
Will the RBA stop raising rates?
“There is a chance that the RBA may halt for the time being and wait for the quarterly price index and another labor market report” after 350 basis points of rate increase overall.
“Yet, it might highlight the likelihood of more rises and make them contingent on the following data releases. This would dampen the market’s anticipation of a rate drop. Such a result would undoubtedly be advantageous to the Australian.
USD/JPY: A trip to 134.00 is still planned – UOB
According to UOB Group’s Senior FX Strategist Peter Chia and Markets Strategist Quek Ser Leang, more upside in the USD/JPY is still anticipated to recapture the 134.00 zone shortly.
The big barrier around 134.20 may be out of reach, but a breach of 133.50 won’t be shocking, according to our 24-hour outlook from last Friday. The Dollar surpassed 133.50. However, it rapidly fell from 133.59. The US Dollar’s upward trend has mostly stayed the same, and additional gains are doubtful. The current US Dollar trading range is likely between 132.55 and 133.55.
For the next three weeks: “On Friday (March 30, spot at 132.60), we indicated that the current US Dollar weakness has finished and that the US Dollar recovery may go as far as 134.20. We are still of the same opinion. The present upward pressure will continue as long as the US dollar remains above 131.90 (last Friday’s “strong support” level was at 131.70).
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