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All eyes on the ECB meeting

April 14, 2022

EUR/USD: The euro rose against the dollar on Wednesday as the euro reversed course and turned positive ahead of a policy-setting meeting at the European Central Bank on Thursday. Although the market is not anticipating any interest rate changes from the ECB at Thursday’s meeting, market participants will be looking for a more hawkish tone from ECB President Christine Lagarde that could tee up a rate hike later in the year. Euro zone inflation came in at 7.5% in March, with a peak still seen months away, thus, investors will be watching the ECB meeting closely looking for hints of policy normalization. Immediate resistance can be seen at 1.0920, an upside break can trigger a rise towards 1.0970.

BUY STOP 1.0920 /TP 1.0970/SL 1.0900

 

USD/CAD: The Canadian dollar strengthened against the U.S. dollar on Wednesday, recovering from its lowest level in nearly four weeks, as oil prices climbed and the Bank of Canada announced its biggest single interest rate hike in more than two decades. The central bank raised its benchmark overnight rate to 1% from 0.5% and announced a quantitative tightening program starting April 25. The BoC last hiked by half a percentage point in May 2000. The prospect of further rate hikes, coupled with rising oil prices, will continue to support the Canadian dollar. Immediate support is seen at 1.2520, a break below could take the pair towards 1.2440.

SELL STOP 1.2520/TP 1.2440/SL 1.2550

 

GBP/USD: Sterling edged up on Wednesday after briefly dropping to its lowest level against the U.S. dollar since November 2020 as British consumer price inflation leapt to its highest level in three decades. Raising doubts about how aggressive the Bank of England will be in tightening monetary policy, British consumer prices jumped to an annual rate of 7.0% in March, the highest since March 1992 and up from 6.2% in February. High inflation increases the likelihood of another rate hike, which may further support the position of the British currency. Immediate resistance can be seen at 1.3150, an upside break can trigger a rise towards 1.3220.

BUY STOP 1.3150/TP 1.3220/SL 1.3120