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The Canadian dollar climbed up against its major opponents in the European session on Friday, after better-than-expected domestic customer cost inflation for June and retail sales for May.

Data from Statistics Canada revealed that consumer rate index was flat on a seasonally changed regular monthly basis, following a 0.2 percent slide in May. Economists were trying to find a 0.1 percent drop.

Core CPI, excluding food and energy, rose 0.2 percent on a seasonally changed monthly basis, from a 0.1 percent gain last month.

Retail sales increased for the third successive month, increasing 0.6 percent to $48.9 billion in May.

This exceeded projections for a 0.3 percent uptick and follows a downwardly modified 0.7 percent boost in April.

Core retail sales, leaving out motor vehicle and parts dealers, dropped 0.1 percent month-on-month in May, compared with a downwardly modified 1.3 advance in the previous month. The index was anticipated to be flat.

On the other hand, oil prices fell ahead of the OPEC meeting next week, when OPEC and Russia will satisfy in Moscow to discuss their supply quota plan.

Petroleum for September shipment fell $0.72 to $46.20 a barrel.

The loonie showed combined efficiency in the Asian session. While the loonie dropped against the euro and the greenback, it held stable versus the yen. Versus the aussie, it increased.

The loonie advanced to 1.2546 versus the greenback, off its early low of 1.2609. The next possible resistance for the loonie is seen around the 1.24 location.

Having fallen to a 9-day low of 1.4683 versus the euro at 2:45 am ET, the loonie climbed to 1.4601. Extension of the loonie’s uptrend may see it challenging resistance around the 1.45 mark.

The Study of Expert Forecasters published by the European Reserve bank revealed that the Eurozone economy is anticipated to broaden at faster than expected pace.

SPF respondents raised 2017 development outlook to 1.9 percent from 1.7 percent and that for next year to 1.8 percent from 1.6 percent. Expectations for 2019 was raised partially to 1.6 percent from 1.5 percent.

The loonie was selling a favorable area versus the aussie with the pair trading at 0.9955. This may be compared with a 3-day peak of 0.9920 set at 11:45 pm ET. More uptrend may take the loonie to a resistance around the 0.97 region.

The Reserve Bank of Australia’s Deputy Governor Man Debelle said that Australia’s rate of interest need not increase automatically with the tightening of other reserve banks.

“Simply as the policy rate in Australia did not need to decrease to the extremely low levels seen in other parts of the world, that other reserve banks increase their policy rates does not immediately imply that the policy rate here has to increase,” Debelle stated in Adelaide.

The loonie bounced off to 88.90 versus the Japanese yen, from a 3-day low of 88.45 hit at 8:15 am ET. The loonie is most likely to target resistance around the 92.00 level.

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Bank Indonesia is most likely to keep its policy rate unchanged at least until the end of this year, as policymakers see the position as neutral, amidst weaker growth, economists at Capital Economics stated.

On Thursday, the central bank left its key rate of interest unchanged at 4.75 percent for a ninth session in a row.

“A senior BI official has characterised the policy position as neutral, which reinforces our conviction that rates will remain on hold for some time yet,” economic experts said.

The policy declaration acknowledged that development had been weaker in the second quarter than the bank had previously anticipated, financial experts observed.

Capital Economics expects that Indonesia’s growth will be around Q1’s 5.0 percent annual growth rate through this year and 2018.

“For this reason, the economy would gain from rates of interest cuts,” financial experts added.

The economy is still facing few tailwinds amidst weak incoming activity data and slow credit development, weak fiscal position and disappointing development on reform.

But a rate cut is not likely this year given the reserve bank’s concerns about inflation, economists kept in mind.

The annual headline inflation in June still reached 4.4 percent, the highest it has been because March last year and nudging the top-end of Bank Indonesia’s 3-5 percent inflation target band.

The increase in inflation was generally owned by greater prices for fuel owing to minimized government subsidies.

The rate of inflation will show short-term, policymakers are unlikely to run the risk of any damage to their track record by cutting rates while inflation remains raised, economists pointed out.

“All told, we continue to expect that the benchmark rate will be kept at 4.75 percent at least till completion of the year,” Capital Economics’ economists anticipated.

“Even more ahead, if inflation drops back as we expect in 2018 and frets about the currency exchange rate remain controlled, rate cuts could return onto the program.”

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Recently, the USD/JPY pair has been trading downwards. As I expected, the price tested the level of 111.26. According to the 4H time frame, the price is still making lower highs and lower lows, which is a sign that sellers are in control. Strong breakout of a rising wedge in the background is a strong technical signal for a further downward move. My advice is to watch for potential selling opportunities. The downward targets are set at the price of 111.00 and 111.65.

Resistance levels:

R1: 111.68

R2: 112.00

R3: 112.20

Support levels:

S1: 111.15

S2: 111.95

S3: 110.60

Trading recommendations for today: watch for potential selling opportunities.

The material has been provided by InstaForex Company – www.instaforex.com

Recently, the EUR/USD pair has been trading upwards. As I expected, the price tested the level of 1.1676. According to the 15M time frame, I found broken yesterday’s high and a successful re-test, which is a sign that selling looks risky. My advice is to watch for potential buying opportuntiies. Another sign of strength is that RSI is rejecting from 50 level. The upward target is set at the price of 1.1675.

Resistance levels:

R1: 1.1650

R2: 1.1665

R3: 1.1675

Support levels:

S1: 1.1630

S2: 1.1620

S3: 1.1610

Trading recommendations for today: watch for potential buying opportunities.

The material has been provided by InstaForex Company – www.instaforex.com