May 17, 2022
GBP/USD: Sterling strengthened against the dollar on Monday as traders awaited the UK and U.S. data that could reduce downward pressure on sterling. Risk-sensitive sterling has fallen 10% against the dollar this year as rising inflation, poor domestic economic growth and fears for a slowdown in the global economy have hit risk sentiment. Today, the dynamics of the pound will depend on the UK labor market data. Another weak report could send the pound significantly lower than current levels. Immediate support is seen at 1.2300. A breakout below could take the pair towards 1.2200.
SELL STOP 1.2300/TP 1.2200/SL 1.2330
EUR/USD: The euro edged higher against the dollar on Monday after European Central Bank policymaker Villeroy de Galhau said a weak euro threatened price stability in the currency bloc. The currency has tumbled almost 9% since February and fell to its lowest levels since 2017 last week, a move that accelerated upward pressure on inflation in the euro area, which is already running at record highs at 7.5%. The European Commission’s quarterly report, released on Monday, said the Russian-Ukrainian conflict will slow economic growth this year as higher energy prices weigh on household spending and corporate profits. In other words, a recession awaits the European economy. Immediate support is seen at 1.0400. A breakout below could take the pair towards 1.0340.
SELL STOP 1.0400/TP 1.0340/SL 1.0420
USD/CAD: The Canadian dollar strengthened against the U.S. dollar on Monday as higher oil prices and a weaker dollar boosted the Canadian dollar across the board. U.S. June crude oil futures rose $3.7 to settle at $115 a barrel on Monday. Canadian factory sales grew by 2.5% in March from February versus the expected 1.7%. If the bullish dynamics in the oil market continues, the Canadian dollar will have a chance to strengthen its position. Immediate support is seen at 1.2800. A breakout below could take the pair towards 1.2750.
SELL STOP 1.2800/TP 1.2750/SL 1.2820