Published on May 4, 2023

Daily Analysis For USD/CAD 04-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
01:00	(Japan) Greenery Day	None	JPY
01:00	(Latvia) Declaration of Independence Day	None	EUR
01:01	(Ireland) AIB Services PMI	Low	EUR
02:30	(Australia) Exports MoM	Low	AUD
02:30	(Australia) Imports MoM	Low	AUD
02:30	(Australia) Balance of Trade	High	AUD
02:45	(China) Caixin Manufacturing PMI	High	CNY
06:00	(Estonia) Industrial Production MoM	Low	EUR
06:00	(Estonia) Industrial Production YoY	Low	EUR
07:00	(Germany) Balance of Trade	High	EUR
07:00	(Germany) Exports MoM	Medium	EUR
07:00	(Germany) Imports MoM	Low	EUR
08:00	(Spain) Unemployment Change	High	EUR
08:00	(Spain) Tourist Arrivals YoY	Low	EUR
08:15	(Spain) S&P Global Services PMI	High	EUR
08:15	(Spain) S&P Global Composite PMI	Low	EUR
08:45	(Italy) S&P Global Services PMI	High	EUR
08:45	(Italy) S&P Global Composite PMI	Low	EUR
08:50	(France) S&P Global Services PMI	Medium	EUR
08:50	(France) S&P Global Composite PMI	Low	EUR
08:55	(Germany) S&P Global Services PMI	High	EUR
08:55	(Germany) S&P Global Composite PMI	Low	EUR
09:00	(Euro Area) S&P Global Composite PMI	Low	EUR
09:00	(Euro Area) S&P Global Services PMI	High	EUR
09:00	(United Kingdom) New Car Sales YoY	Low	GBP
09:30	(United Kingdom) S&P Global/CIPS UK Services PMI	High	GBP
09:30	(United Kingdom) Net Lending to Individuals MoM	Low	GBP
09:30	(United Kingdom) Mortgage Approvals	Medium	GBP
09:30	(United Kingdom) Mortgage Lending	Medium	GBP
09:30	(United Kingdom) BoE Consumer Credit	Medium	GBP
09:30	(United Kingdom) S&P Global/CIPS Composite PMI	Low	GBP
09:40	(Spain) Index-Linked Obligacion Auction	Low	EUR
09:40	(Spain) Obligacion Auction	Low	EUR
09:40	(Spain) Bonos Auction	Low	EUR
09:40	(Spain) 3-Year Bonos Auction	Low	EUR
10:00	(France) New Car Registrations YoY	Low	EUR
10:00	(Cyprus) Inflation Rate YoY	Low	EUR
10:00	(Cyprus) Inflation Rate MoM	Low	EUR
10:00	(Euro Area) PPI MoM	Low	EUR
10:00	(Euro Area) PPI YoY	Low	EUR
10:00	(France) 10-Year OAT Auction	Low	EUR
11:00	(Ireland) Unemployment Rate	Low	EUR
12:30	(Germany) New Car Registrations YoY	Low	EUR
12:30	(United States) Challenger Job Cuts	Low	USD
13:15	(Euro Area) Marginal Lending Rate	Low	EUR
13:15	(Euro Area) Deposit Facility Rate	High	EUR
13:15	(Euro Area) ECB Interest Rate Decision	High	EUR
13:30	(Canada) Imports	Low	CAD
13:30	(Canada) Exports	Low	CAD
13:30	(Canada) Balance of Trade	High	CAD
13:30	(United States) Unit Labour Costs QoQ	Medium	USD
13:30	(United States) Nonfarm Productivity QoQ	Medium	USD
13:30	(United States) Jobless Claims 4-week Average	High	USD
13:30	(United States) Continuing Jobless Claims	High	USD
13:30	(United States) Initial Jobless Claims	High	USD
13:30	(United States) Balance of Trade	High	USD
13:30	(United States) Exports	Medium	USD
13:30	(United States) Imports	Medium	USD
13:45	(Euro Area) ECB Press Conference	High	EUR
15:00	(Canada) Ivey PMI s.a	High	CAD
15:30	(United States) EIA Natural Gas Stocks Change	Low	USD
15:30	(United States) NY Fed Treasury Purchases TIPS 1 to 7.5 yrs	Low	USD
16:30	(United States) 8-Week Bill Auction	Low	USD
16:30	(United States) 4-Week Bill Auction	Low	USD

Today's Scenario: - The USD/CAD pair has fallen below the key support level of 1.3600, following a failed attempt to hold above the important resistance of 1.3620 during the Asian session. The Canadian dollar has gained strength, putting pressure on the pair, as oil prices have rebounded strongly after hitting a yearly low of $63.60.

Previously, oil prices had experienced a significant drop due to concerns of a global economic slowdown, as major central banks are tightening their monetary policies to combat inflation. After the Fed increased interest rates by 25 basis points, oil prices were heavily sold, but managed to recover some gains after the US central bank maintained a neutral stance on interest rate guidance.

Buy Scenario: - The USD/CAD pair is currently approaching the 61.8% Fibonacci retracement level, which is placed from the high of March 10 at 1.3862 to the low of April 14 at 1.3301. The downward trendline, which started from the March 10 high at 1.3862, has been acting as a major obstacle for the US Dollar buyers.

The 20-period Exponential Moving Average (EMA) at 1.3600 is acting as a support level for the US Dollar buyers.

At the same time, the Relative Strength Index (RSI) (14) is attempting to move into the bullish range of 60.00-80.00. This could trigger the bullish momentum for the asset.

If the price breaks above the 61.8% Fibonacci retracement level at 1.3650, it could trigger a reversal and drive the pair towards the resistance level of 1.3700. If the price breaks above that level, the next target could be the high of March 22 at 1.3745. Till we do not advise to buy USD/CAD.

Sell Scenario: - On the other hand, if the price breaks decisively below the low of May 02 at 1.3529, it could expose the asset to the psychological support level at 1.3500, followed by the 23.6% Fibonacci retracement level at 1.3438. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -