BoC Holds Rates Steady, Cuts GDP Forecasts

Intraday Technical Analysis 25 April

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The Bank of Canada’s monetary policy meeting yesterday saw the interest rates unchanged at 1.75%. However, the central bank cut the GDP forecasts for Canada from 1.7% to 1.2% for 2019.

The BoC was optimistic that growth would pick up in the second half of the year. The removal of the hawkish forward guidance also weighed on the CAD which fell over 0.5% on the day.

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German Business Sentiment Weighs on the Euro

The business sentiment report from Germany came out softer than expected to impact the euro currency. The common currency lost 0.55% on the day as it plunged below the 1.1200 handle. The Ifo institute’s business sentiment report saw the index falling to 99.2 in April from 99.7. Meanwhile, French business sentiment report also weakened.

Euro Slips to 1.115 – What’s next?

The common currency fell sharply on the day and cleared the support level of 1.1200 to test 1.1150. The intraday charts point to a potential recovery, but the gains could be limited in scope. The previous lows of 1.1174 will form the initial resistance followed by 1.1217 which could keep a lid on the recovery, at least for now.

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WTI Holds Steady Despite Inventory Build-Up

Crude oil prices held on to the gains albeit posting some modest declines. Overall, crude oil prices remain steady at the top. The EIA’s weekly crude oil inventory report saw an increase of 5.48 million barrels. This was above the estimates of a 1 million increase. The weekly report reversed the drawdown of 1.4 million barrels from the week before. The data comes on top of API’s report showing a 6.9 million increase for the week.

Crude Oil to Remain Bullish in the Near Term

Oil prices retreated from the highs on Wednesday closing with some modest declines on the day. However, we are seeing a reversal of these declines earlier today. Price is likely to attempt and test the previous highs in the range of 66.50 – 66.00. Watch for a weekly close above this level to confirm further upside. Failure to do so could trigger declines to the lower support at 64.55.

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Gold Continues to Consolidate Near the 200-day MA

Gold prices were seen trading mixed on Wednesday with prices seen consolidating at the 200-day moving average. The precious metal posted modest gains on the day as price steadily picked up after hitting lows of 1266.25 earlier this week. Friday’s advance GDP report is likely to be the catalyst for setting the momentum in the precious metal.

XAUUSD Looking More Likely for a Retest to 1285

XAUUSD previously eased lower to chalk out fresh lows. However, price has since rebounded with the 200-day moving average offering support. In the short term, price has closed above 1273 handle. Establishing support here could keep gold prices to remain range bound within the 1285 and 1273 corridor. The retest of the 1285 level will be crucial. Further gains can be expected if gold breaks past this level.xauusd

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