April 28, 2022
GBP/USD: Sterling fell to a new 21-month low against a strengthening dollar on Wednesday after Britain’s weak economic outlook and higher than expected government borrowing dented the Bank of England’s (BoE) monetary tightening narrative. Money markets have been scaling back bets on the size of BoE rate hikes, pricing in around 140 basis points worth of tightening by year-end from 160 bps last Friday. Data showed that government borrowing in the 2021 financial year was almost 20% higher than forecast. Optimism among British manufacturers has fallen at its fastest pace since the coronavirus crisis, adding to signs of a slowdown in the economy on the back of rising inflation. Immediate support is seen at 1.2500. A breakout below could take the pair towards 1.2400.
SELL STOP 1.2500/TP 1.2400/SL 1.2530
USD/CAD: The Canadian dollar was little changed against the U.S. dollar on Wednesday, holding near its weakest level in more than six weeks, as investors grew more worried that Europe’s economy could tip into recession. The safe-haven U.S. dollar climbed against a basket of major currencies as Russia halted gas supplies to Bulgaria and Poland. The loonie was trading nearly unchanged at 1.2830 to the greenback. It followed four straight days of declines. Immediate resistance can be seen at 1.2850. A breakout to the upside can trigger growth towards 1.2950.
BUY STOP 1.2850/TP 1.2950/SL 1.2820
EUR/USD: The euro fell below 1.06 for the first time in five years against a broadly strong U.S. dollar on Wednesday amid rising concerns around energy safety and growth slowdown in China and Europe. The euro slipped to a five-year low of $1.05860 after Russia’s Gazprom said it would cut gas supply to Poland and Bulgaria. The single currency has fallen more than 4% so far in April and is heading for its worst monthly loss in more than seven years as uncertainty around the crisis in Ukraine and China’s COVID lockdown measures led traders to ditch the euro in favor of the safe-haven dollar. Immediate support is seen at 1.0500. A breakout below could take the pair towards 1.0440.
SELL STOP 1.0500/TP 1.0440/SL 1.0520