Canadian inflation softened more than expected in February, bringing potential rate cuts closer at a time when markets foresee the Fed having to delay its first cut until July
1.3500 posed as support as far back as October 2022 and has reappeared to provide either support or resistance thereafter. The current directional move has its sights set on a test of channel resistance which is likely to coincide with the 61.8% Fibonacci retracement of the major 2020 to 2022 move . However, the massive upper wick developing today, could signal that bulls may need to regroup before another push higher.
On the other hand, markets are pushing back estimates of when the Fed may cut interest rates from June to July. Delaying monetary easing in this fashion naturally support the dollar as the greenback is likely to enjoy a superior interest rate differential compared to most G7 currencies, for a little while longer.Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.
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