Light Friday Ahead, USD Strengthens

Light Friday Ahead, USD Strengthens
Sentiment remained fragile on Friday, but stock markets were trying to recover from this week's selling.
US benchmarks staged a recovery yesterday as indices erased their intraday losses, closing in positive territory. However, the short-term outlook still appears bearish amid rising US yields and the approaching 50 bps rate hike by the Fed.

Earlier in the week, the US has ratcheted its sanctions against Moscow, hitting Russian Sberbank and Alfa Bank and prohibiting investment in the country by American companies. At the same time, the EU backed a Russian coal embargo, although so far without officially confirming it. 

Later today, the Canadian labor market data for March are due. with the net change in employment expected to decline sharply from 336,000 to 80,000. The unemployment rate will likely improve slightly to 5.4%. 

It looks like the USDCAD pair has posted a double bottom near 1.2450, a bullish reversal formation. Considering the recent weakness in oil and today's data, the pair might return above its 200-day average at 1.2620.

Elsewhere, the EURUSD pair is down seven days in a row, dropping toward the March cycle lows at 1.08 as the divergence between EU and US monetary policies grows every week. At the same time, the USDJPY pair rose above 124 and seems ready to attack the multi-year top at 125.
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