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Forex: USD/CAD edges lower to 1.0135/36

FXstreet.com (Barcelona) - The USD/CAD broke lower Wednesday during European trading, following a movement off of the 1.0159 level recently. The movement lower took the pair into negative territory, where the cross now resides at 1.0135/36, down -0.15% in these moments.

The short-term trend points lower for the USD/CAD, pressuring retracement support at 1.0134, though key supports (now resistance at 1.0165/85) yielded and their loss suggests an extended move lower still has to play out in the short-run. We ultimately favor selling rallies and targeting a drop.” suggests the TD Securities Team.

With regards to the CAD, the price of WTI crude is trading at USD $96.80/bbl in these moments. Later today in the United States, several economic indicators are on tap, principally ADP employment change and manufacturing data.

Mataf.net analysts points to support at 1.0129, ahead of 1.0109, and 1.0093. On the ascension, the USD/CAD is slated to face short-term resistance at 1.0165, onto 1.0181, and finally 1.0201.

Forex Flash: BoE may ease further in May or August after more muddling through – TD Securities

“Not enough growth” is what TD Securities point as the superficial problem in the UK with no doubt, but the BoE is conflicted as to what the underlying afflictions are, as well as what the potential remedies would be. “The plan continues to be targeting pockets of weakness as best as possible”, they wrote, adding that downside data surprises through Q1 increase the risk of BoE action, but they continue to demand more justification before providing broad stimulus like QE. “If the economy continues to muddle through, May or August do become potential dates for further easing, but the form is wide open”, wrote analyst Richard Kelly, seeing hope of more FLS to replace expensive market funding with cheap central bank cash as Bank’s wholesale funding costs continue to be too high. That would bringing down lending rates and boosting credit. “We have seen some of this, and in fact, we have seen more impact on mortgage rates than we expected”, Kelly added, also expecting the supply incentive for banks to lend to be further complemented by HMTs augmentation of home buying demand schemes in the budget. “But with the Financial Policy Committee having reinforced the need, principally of RBS and Lloyds, to rebuild further capital this year that is likely going to come at the expense of lending growth. Repairing balance sheets and mitigating macroprudential risks continues to limit monetary stimulus effectiveness”, they concluded.
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