17.11.202213:44 Forex Analysis & Reviews: Markets may bounce back amid weaker dollar demand

Stock rally halted on Wednesday. At first, attention was focused on the incident in which a Ukrainian missile fell on the territory of Poland, but when it became clear that the news would not cause a collapse in markets, the focus shifted to the incoming retail sales data and industrial output in the US.

Everything was fine, but the mood of investors was spoiled by the report of Target, whose shares collapsed in the premarket by more than 13% due to weak corporate reporting. The situation could not even be turned around by good data on US retail sales even though it showed noticeably higher growth in October both monthly and yearly terms.

At the same time, dollar rose because of the events in Poland, completely ignoring the resumption of decline in Treasury yields. But today, US stocks are trying to recover, which seems to indicate that investors, having won back yesterday's negative, may resume buying shares today.

One of the important events today that could affect markets is the release of CPI data in the eurozone, which, according to forecasts, should grow to 10.7% y/y and by 1.5% m/m. If the figures turn out to be no worse than expected, euro will rise because the ECB will be stimulated to act more aggressively in terms of raising interest rates.

Forecasts for today:

USD/CAD

The pair is trading in the range of 1.3230-1.3365 amid the consolidation of crude oil prices and uncertainty around the escalation of crisis caused by the events in Poland. If today the stock market in the US opens on a positive note and risk appetite grows, the quote will fall to 1.3230. Meanwhile, a negative scenario will push the pair up, and, having broken out of the range, it will rush to 1.3420.

EUR/USD

The pair is consolidating above 1.0375 ahead of the inflation data in the eurozone. Its growth and positive dynamics in the US stock market may push the quote to 1.0500.