Markets are still in a complicated situation. Stock markets are relatively volatile, while commodity markets are teetering on fears of a recession. The forex market currently has no definite trend.
The main reason for this is the uncertainty on whether economies will enter a recession or not. Opinions of experts are divided, with some believing that a further fall is possible, while others presume that this is the lowest the markets can go and subsequent movements will depend on the incoming economic data.
In this regard, today's publication of 1st quarter GDP is very important. Forecasts say the US economy will fall 1.5%, indicating the start of a recession. If that really happens, stocks will rally, while dollar will go down because of the return of risk appetite and demand for commodity assets. But if the data shows a larger decline, then the opposite picture can be seen.
Another key event is the speeches of Christine Lagarde and Jerome Powell, which will most likely address the continued rise of inflation and hint that interest rates will increase again. But a completely new rhetoric will limit growth or decline, at least until this Friday's release of data from the EU and the US. The figures will set the markets, albeit in a short-term.
Forecasts for today:
EUR/USD
The pair is currently trading in the range of 1.0490-1.0600. If Lagarde hints at another rate increase in July and makes it clear that it could be more than 0.25%, the quote will rush to 1.0600.
USD/CAD
A decline below 1.2860 will lead to a further fall to 1.2820.