EURCAD rose slightly after remarks from two prominent central bankers. ECB's Chief Economist Philip Lane said that as a result of the tightening, inflation is expected to be 1.2% lower in 2023 and 1.8% points lower in 2024. In his opinion ECB monetary policy will ensure that inflation returns to our target in a timely manner over time. The calibration of the monetary policy stance must be reviewed on a regular basis in response to new information about underlying inflation.
Meanwhile BoC governor Macklem expects CPI inflation in Canada to fall to around 3% in the middle of this year and reach the 2% target in 2024, however if evidence accumulates that inflation is not declining as expected, BoC is prepared to raise policy rates further. Noticed some evidence that rate hikes are starting to slow demand and rebalance the economy.
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EURCAD pair managed to climb above the 50 SMA (green line) on Thursday and if bulls manage to uphold recent momentum, an upward move may accelerate towards local resistance at 1.4455, which is marked with previous price reactions. However if sellers manage to regain control, then the pair may retest lower limit of the consolidation at 1.4230, which coincides with 23.6% Fibonacci retracement of the upward wave launched in August 2022. Source: xStation5
