Daily Winners and Losers

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CurrencyLastHighLowDaily Change (pip)Daily Range (pip)
GBPUSD1.63151.6331.62535977

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The British Pound extended the advance from earlier this week to reach a fresh yearly high of 1.6329, and the exchange rate may continue to trend higher in March as investors speculate the Bank of England to gradually normalize monetary policy over the coming months. The GBP/USD remains nearly 60 points higher from the open after moving 60% of its average true range, and the pair may make a run at the 2010 high (1.6456) as the near-term rally gathers pace. However, there could be a small correction going into the Asian trade as the relative index falls back from a high of 68, and the exchange rate may close the gap from the 240-SMA at 1.6184 before we see another push to the upside. As the economic docket for the U.K. remains fairly light for the remainder of the week, risk sentiment should drive price action for the GBP/USD, but hawkish comments from the BoE are likely to prop up the sterling as investors weigh the prospects for future policy.

Key Levels/Indicators

Level/IndicatorLevel
2010 High1.6456
10-Day SMA1.6187
20-Day SMA1.6141
Daily RSI63

Upcoming Events

GMTImportanceReleaseExpectedPrior
9:30LOWPurchasing Manager Index Construction (FEB)52.853.7
CurrencyLastHighLowDaily Change (pip)Daily Range (pip)
USDCAD0.97400.97560.96842672

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The Canadian dollar weakened against its major counterparts on Tuesday as the Bank of Canada maintained a neutral tone for future policy, and the loonie may continue to pare the rally that was carried over from the previous month as the central bank talks down speculation for a rate hike in the first-half of 2011. The USD/CAD is 20+ pips higher on the day after moving 100% of its ATR, and the exchange rate may continue to push higher going into the middle of the week as the pair bounces back from a fresh yearly low of 0.9684. However, the lack of momentum to push above the 120-SMA at 0.9758 could spur a small correction in the exchange rate, the dollar-loonie may consolidate throughout the remainder of the day as the RSI falls back from overbought territory. With the BoC interest rate decision out of the way, market participants will certainly turn their focus to the U.S. non-farms payroll report due out on Friday, and the exchange rate may hold steady ahead of the labor report as employment in the world's largest economy is expected to expand another 190K in February.

Key Levels/Indicators

Level/IndicatorLevel
50-Day SMA0.9923
20-Day SMA0.9864
10-Day SMA0.9822
Daily RSI36

Upcoming Events

GMTImportanceReleaseExpectedPrior
13:30LOWIndustrial Product Price (MoM) (JAN)0.8%0.7%
13:30LOWRaw Materials Price Index (MoM) (JAN)3.0%4.2%

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To discuss this report contact David Song, Currency Analyst: dsong@dailyfx.com