US CPI rates due out today

The US CPI rates for March are due to be released during today’s American session. There appears to be a divergence between the headline CPI and Core CPI rate, with the headline CPI rate expected to showcase an acceleration in inflationary pressures in the US economy on a year-on-year basis, whereas the Core CPI rate is expected to showcase easing inflationary pressures on a yearly basis. The current market expectations are for the headline CPI rate to accelerate to 3.4% from 3.2% and for the Core CPI rate to ease to 3.7% from 3.8%. Should the rates come in as expected, they could potentially mitigate each other’s potential impact on the dollar. However, should the headline CPI rate come in as expected or higher in addition to the Core CPI coming in higher than expected, it could provide support for the greenback, as it may pressure the Fed to adopt a more hawkish tone, thus implying interest rates remaining higher for longer and vice versa. Over, in Canada, the BoC’s interest rate decision is due to take place today. CAD OIS currently implies a 81% probability for the bank to remain on hold with the rest being attributed to a potential cut. Such a scenario could provide support for the Loonie. In today’s Asian session, the RBNZ remained on hold as was widely expected, keeping the official cash rate at 5.5%. In the bank’s accompanying statement, it appears that policymakers appeared to be concerned about the risk of persistent inflationary pressures in the economy. As such the accompanying statement could be perceived as slightly hawkish in nature, which may have aided the NZD.

On a technical level, US100 appears to be moving in a sideways fashion, having broken below our upwards moving channel which was incepted on the 31  of January. We continue to maintain a sideways bias for the index and supporting our case is the aforementioned breaking of our upwards moving channel, in addition to the RSI indicator below our chart which currently registers a figure near 50, implying a neutral market sentiment. For our sideways bias to continue, we would require the index to remain within the sideways channel formed by the 17800 (S1) support level and the 18500 (R1) resistance ceiling. On the other hand, for a bearish outlook, we would require a clear break below the 17800 (S1) support level, with the next possible target for the bears being the 17160 (S2) support level. Lastly, for a bullish outlook we would require a clear break above the 18500 (R1) resistance line with the next possible target for the bulls being the 19100 (R2) resistance line.

USD/CAD appears to be moving in a sideways fashion. We maintain a sideways bias for the pair and supporting our case is the RSI Indicator below our chart which currently registers a figure near 50, implying a neutral market sentiment in addition to the narrowing of the Bollinger bands which imply low market volatility. For our sideways bias to continue, we would require the pair to remain confined between the 1.3545 (S1) support level and the 1.3630 (R1) resistance line. On the other hand, for a bullish outlook we would require a clear break above the 1.3630 (R1) resistance line, with the next possible target for the bulls being the 1.3705 (R2) resistance line. Lastly, for a bearish outlook we would require a clear break the 1.3545 (S1) level, with the next possible target for the bears being the 1.3465 (S2) support line.

Autres faits marquants de la journée :

In a busy Wednesday, we make a start with Sweden’s GDP rate for February, Norway’s CPI rates, the Czech Republic’s CPI rates and the US CPI rates all for the month of March, following by the weekly US EIA crude oil inventories figure. In tomorrow’s Asian session we note China’s PPI rate and CPI rate both for March. On a monetary level, we highlight the speeches by Norway’s Central Bank Governor Ida Wolden Bache, Fed Governor Bowman, BoC Governor Tiff Mackle and Chicago Fed President Goolsbee. Moreover, we highlight the Bank of Canada’s Interest rate decision and the release of the US FOMC March meeting minutes.

US100Cash Daily Chart

Support: 17800 (S1), 17160 (S2), 16300 (S3)

Resistance: 18500 (R1), 19100 (R2), 19700 (R3)

Graphique de l’USD/CAD H4

Support: 1.3545 (S1), 1.3465 (S2), 1.3365 (S3)

Resistance: 1.3630 (R1), 1.3705 (R2), 1.3790 (R3)

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