The loonie could stay lower this week ahead of the interest rate announcement this Wednesday at 12:00 pm EST. The Central Bank of Canada would keep its interest rates unchanged and the economy finds itself with an inflation of historical record of 30 years. The BBC’s lack of initiative could leave investors with no incentive to stay in the Canadian dollar. On the contrary, the subsequent press conference could go ahead and announce future positive steps towards a rise in interest rates for the first quarter of this year 2022.
On the other hand, the FED is added the same day hours later. Market conditions remain unchanged and the inflation target is still far from 2%. However, the Federal Reserve commission has stood out during the second year of the pandemic for a firm proposal to normalize economic policy as a preliminary step to adjust future inflation.
USDCAD will stay higher this week between 1.26 and 1.2560. The preference is sell below 1.2550 to 1.2530 and 1.25. A short position above 1.2610 will change our preference to short. Above 1.26 the market remains buyer until 1.27 and 1.28. Everything will depend on who remains more or less hawkish in the week.
EURUSD remains below the minimum necessary for the buy. Below 1.1350 sell pressure will remain until 1.13 and 1.1290. If Monday’s market open cooperates with the Euro then we continue higher above 1.1350 to 1.1365 and extensions. We are not sure of buyers until the highs of 1.15. At the moment the official highs remain between 1.1360 and 1.1370.
Gabriel Makhlouf, member of the Governing Council of the European Central Bank suggests that inflation should fall in 2022 as energy and supply chain lockdowns ease, although it is likely to remain at prices above 2% in the zone. of the euro for the rest of the year, as Makhlouf said he does not expect the ECB to raise interest rates in 2022, although policymakers “will have to be vigilant.”
The “big challenge” will be keeping an eye out for side effects of inflation, such as rising wages without corresponding increases in productivity. “If we see risks of those kinds of second-round effects happening, we will definitely take action at the European Central Bank to manage that,” he said. Eurozone consumer prices rose at a record annual rate of 5% in December after a 4.9% rise in November.
As economies recover from the pandemic, monetary policy may tighten compared to the last two or three years.
The Bank of England raised interest rates in December and the ECB expects the US Federal Reserve to do so at its next meeting, Europe is “probably on a bit of a slower track to see what could be described as standardization,” Makhlouf said.
GBPUSD remained lower for the week. Above 1.3550 we expect buyers to take initiative and take the price to 1.36. 1.35 buyers manage to hold above Jan 2022 lows.
Commodities gold and silver maintained bullish rallies in the week. US rate decisions this week could leave the metals market demotivated. Preference is short on gold below 1830.0 and on silver below 24.0. Meanwhile buyers hold on to the market.
The main cryptocurrency market BTC and ETH were down. The levels respond to the middle of the year of 2021. BTCUSD could go up to 32,100 and 32,000. Losing those prices, the fall would be accentuated up to 20,000 and even more. ETH also lost ground and fell to 2400 and 2300.
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