Forex market today

[Polakandil]

Waiting for UK inflation data, GBP/USD rose slightly above the middle band

The GBPUSD pair has still been moving in the price range of 1.28705 - 1.30144 since March 11 between the middle band and the upper band line. Yesterday the pair drew a small-bodied bullish candle with a little shadow on the top and bottom of the candle. The price formed a high of 1.29669 low of 1.29020, closing at 1.29431, although slightly up, but generally still moving in the previous week's range.

The dollar index (DXY), which tracks the USD against six major currencies, fell slightly yesterday at a low of 103.944 from the previous high of 104.467. DXY closed at 104.211. The DXY movement is still below the EMA 20, which may be a dynamic resistance. While the RSI is at level 41 with the potential for a downtrend that may continue.

In the US, according to Adriana Kugler, the Governor of the Federal Reserve, stated that in certain categories, there is evidence that inflation has increased again in recent months. Another Fed official, New York Fed President John Williams, said that businesses and households are experiencing increasing uncertainty about the future of the economy.

US inflation concerns may increase and push the Fed to keep interest rates unchanged, which may increase USD adoption. According to the CME group Fedwatch tool, the Fed's likelihood of leaving interest rates unchanged in the current range of 4.25%-4.50% is 87.1%, and the possibility of a 0.25% cut is only 12.9% at the May 7 meeting later.

Today, investors will focus on UK inflation data, CPI year-on-year is estimated to remain at 3.0% the same as the previous revision. The BoE also maintained the latest interest rate of 4.50% issued in March 20. Besides CPI, investors will also pay attention to the Annual Budget Release, which will outline the government's budget for the year.

 

[Polakandil]

EUR/USD is more down ahead of US economic data

Yesterday, EURUSD crossed the middle band line and drew a bearish candle extending the previous decline since March 19. The price formed a high of 1.08027, a low of 1.07440, and a close of 1.07537. The economic outlook in several European countries with negative sentiment seems to be the reason for the weakening of the Euro against the US dollar lately. The trade war echoed by US President Donald Trump is expected to also have an impact on Europe. Trump has repeatedly hinted that he will impose tariffs on Europe because it does not buy enough American goods.

The dollar index (DXY) still maintained its strengthening yesterday after dropping to a low of 103.944. Yesterday, DXY rose to 104.683, trying to cross the EMA 20 from the downside. The RSI indicator drew an upward channel pointing to level 47, indicating that the price is increasingly leaving the oversold zone level.

In Europe, expectations of central banks to lower interest rates are increasing, amid economic risks caused by Trump's tariffs on the continent. With low interest rates, it is hoped that it can boost the domestic economy when external conditions are not supportive.

Germany, one of the developed countries in Europe, has extended the borrowing limit to increase defense spending and create a 500 billion Euro infrastructure fund. This could support the circulation of the Euro in the European region, which in turn supports the domestic economy.

On the other hand, ECB President Christine Lagarde tried to ease concerns and stated that the inflationary impact of the trade war was only temporary and would subside in the medium term.

Investors and traders today will pay attention to US economic data. According to Forexfactory, there will be a release of the Final GDP per quarter, which is estimated to be the same as the previous revision of 2.3%. The Final GDP Price Index is estimated at 2.4%. Meanwhile, the Unemployment Claims data is expected to be 225k from the previous revision of 223k.

 

[Polakandil]

Trump's tariffs threaten the auto industry, USD/CAD slightly up, seeking a new balance.

The USDCAD pair drew a bullish candle yesterday, the Canadian dollar weakened amid US President Donald Trump's new tariff threat on cars manufactured outside the US to be subject to a 25% tariff. Trump's new tariffs will certainly get a response from his trading partner countries, including Japan. Japanese Prime Minister Shigeru Ishiba said his cabinet was considering all kinds of retaliatory measures.

Canadian Prime Minister Mark Carney called Trump's tariffs a direct attack on workers in his country. He said the cabinet would meet on Thursday to discuss retaliatory measures.

In line with Trump's statement, the dollar index (DXY), which tracks the USD against six major currencies, briefly rose to 104.653 but fell later to a low of 104.070 with a close of 104.279. The DXY is moving near the 20 EMA, which seems to act as dynamic resistance at a given time.

US final quarterly GDP data showed a value of 2.4% higher than the expected 2.3%, but the Final GDP Price Index fell 2.3% from the expected 2.4%. While unemployment claims fell 224 from the expected 225k.

Today, investors and traders will focus on the Core PCE Price Index data, which is the Fed's most preferred inflation data for interest rate policy. The PCE index is estimated at 0.3%. On the other hand, Canada will release GDP which is estimated to increase 0.3% from the previous 0.2%.