Published on May 8, 2023

Daily Analysis For USD/CAD 08-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
00:50	(Japan) BoJ Monetary Policy Meeting Minutes	Medium	JPY
01:00	(France) Victory in Europe Day	None	EUR
01:00	(United Kingdom) Bank Holiday for the coronation of King Charles III	None	GBP
01:30	(Japan) Jibun Bank Services PMI	Medium	JPY
01:30	(Japan) Jibun Bank Composite PMI	Low	JPY
02:30	(Australia) Building Permits MoM	Medium	AUD
02:30	(Australia) Private House Approvals MoM	Low	AUD
02:30	(Australia) Building Permits YoY	Low	AUD
02:30	(Australia) NAB Business Confidence	High	AUD
06:00	(Estonia) Inflation Rate YoY	Low	EUR
06:00	(Estonia) Inflation Rate MoM	Low	EUR
06:00	(Estonia) CPI	Low	EUR
07:00	(Finland) Balance of Trade	Low	EUR
07:00	(Germany) Industrial Production MoM	Medium	EUR
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(Greece) Balance of Trade	Low	EUR
10:30	(Germany) 3-Month Bubill Auction	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Industrial Production MoM	Low	EUR
11:00	(Latvia) Industrial Production YoY	Low	EUR
15:00	(El Salvador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate MoM	Low	USD
15:00	(United States) Wholesale Inventories MoM	Low	USD
16:00	(United States) Consumer Inflation Expectations	Low	USD
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
23:45	(New Zealand) Electronic Retail Card Spending MoM	Low	NZD
23:45	(New Zealand) Electronic Retail Card Spending YoY	Low	NZD

Today's Scenario: - The USD/CAD pair initially dropped to near 1.3370 during the early Asian session, but has since found some support. However, it is expected to continue its downward trend due to rising oil prices and the expectation that the Federal Reserve will pause its policy-tightening measures. Additionally, strong labor market data from Canada has renewed fears of more interest rate hikes from the Bank of Canada. In April, Canada's Net Change in Employment was 41.4K, beating expectations of 20K, and the Unemployment Rate dropped to 5.0%, lower than the expected 5.1%. Annual Average Hourly Earnings remained steady at 5.2%.

Buy Scenario: - On the buying side for the USD/CAD Alternatively, if the pair rebounds and rises above the high on April 10 at 1.3554, it could potentially target the high on January 05 at 1.3595. If it breaks above this level, it could target the high on April 26 at 1.3651. Till we do not advise to buy USD/CAD.

Sell Scenario: - The USD/CAD pair is currently in a Symmetrical Triangle chart pattern on a daily timeframe, which signifies a reduction in volatility followed by an eventual increase in the same. The trendline of the pattern that is sloping downwards is connected from the high on October 10, 2022, at 1.3978, while the trendline that is sloping upwards is linked from the low on November 15, 2022, at 1.3226.

The 20-period Exponential Moving Average (EMA) at 1.3500 is closely aligned with the price of the Loonie, indicating a decrease in volatility.

The Relative Strength Index (RSI) (14) has marginally fallen below the bearish range of 20.00-40.00, and a continued decline below this range could potentially accelerate bearish momentum.

Looking ahead, if the USD/CAD pair falls below last week's low at 1.3371, it could extend its decline towards the low on April 17 at 1.3343, followed by the support level at 1.3300. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -