Published on May 5, 2023

Daily Analysis For USD/CAD 05-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
01:00	(Japan) International Children's Day	None	JPY
01:00	(Netherlands) Liberation Day	None	EUR
02:30	(Australia) Home Loans MoM	Medium	AUD
02:30	(Australia) Investment Lending for Homes	Medium	AUD
02:30	(Australia) RBA Statement on Monetary Policy	Medium	AUD
02:45	(China) Caixin Composite PMI	Low	CNY
02:45	(China) Caixin Services PMI	High	CNY
06:45	(Switzerland) Unemployment Rate	High	CHF
07:00	(Germany) Factory Orders MoM	Medium	EUR
07:30	(Switzerland) Inflation Rate MoM	Low	CHF
07:30	(Switzerland) Inflation Rate YoY	Medium	CHF
07:30	(Switzerland) CPI	High	CHF
07:45	(France) Industrial Production MoM	Medium	EUR
07:45	(France) Private Non Farm Payrolls QoQ	Low	EUR
08:00	(Austria) Wholesale Prices YoY	Low	EUR
08:00	(Austria) Wholesale Prices MoM	Low	EUR
08:00	(Austria) Balance of Trade	Low	EUR
08:00	(Slovakia) Retail Sales YoY	Low	EUR
08:00	(Slovakia) Retail Sales MoM	Low	EUR
08:00	(Spain) Industrial Production YoY	Low	EUR
08:00	(Switzerland) Foreign Exchange Reserves	Low	CHF
08:30	(Euro Area) S&P Global Construction PMI	Low	EUR
08:30	(France) S&P Global Construction PMI	Low	EUR
08:30	(Germany) S&P Global Construction PMI	Medium	EUR
08:30	(Italy) S&P Global Construction PMI	Low	EUR
09:00	(Italy) Retail Sales MoM	High	EUR
09:00	(Italy) Retail Sales YoY	High	EUR
09:30	(Slovenia) Balance of Trade	Low	EUR
09:30	(United Kingdom) S&P Global/CIPS Construction PMI	Medium	GBP
10:00	(France) New Car Registrations YoY	Low	EUR
10:00	(Euro Area) Retail Sales YoY	High	EUR
10:00	(Euro Area) Retail Sales MoM	High	EUR
11:00	(Luxembourg) Inflation Rate YoY	Low	EUR
11:00	(Luxembourg) Inflation Rate MoM	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
13:30	(Canada) Average Hourly Wages YoY	Low	CAD
13:30	(Canada) Full Time Employment Chg	Medium	CAD
13:30	(Canada) Part Time Employment Chg	Medium	CAD
13:30	(Canada) Participation Rate	Medium	CAD
13:30	(Canada) Employment Change	High	CAD
13:30	(Canada) Unemployment Rate	High	CAD
13:30	(United States) Manufacturing Payrolls	Low	USD
13:30	(United States) Nonfarm Payrolls Private	High	USD
13:30	(United States) Non Farm Payrolls	High	USD
13:30	(United States) Unemployment Rate	High	USD
13:30	(United States) Government Payrolls	Low	USD
13:30	(United States) Participation Rate	Medium	USD
13:30	(United States) Average Weekly Hours	Low	USD
13:30	(United States) Average Hourly Earnings MoM	Medium	USD
13:30	(United States) Average Hourly Earnings YoY	Medium	USD
14:30	(United States) Used Car Prices MoM	Low	USD
14:30	(United States) Used Car Prices YoY	Low	USD
15:00	(Ecuador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate MoM	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD
20:00	(United States) Consumer Credit Change	Low	USD

Today's Scenario: - The USD/CAD pair has experienced a significant decline due to the strengthening Canadian dollar and a sharp drop in the US dollar index (DXY), along with a recovery in oil prices. The USD/CAD is expected to continue its downward trend and potentially drop towards the key support level of 1.3500, as the overall bearish sentiment for the USD Index intensifies.

The decline in the USD Index is largely attributed to concerns over the US debt ceiling. President Joe Biden is not willing to negotiate with Republicans on the debt ceiling if it means compromising his spending plans. A delay in raising the debt ceiling could result in job losses and a decrease in economic output due to the US Treasury being unable to meet its obligations.

Buy Scenario: - On the buying side for the USD/CAD bulls to regain control, they must break a descending resistance line from March 10, which is currently around 1.3640. Even if the pair rises above this level, April’s peak of about 1.3670 could pose a challenge. Till we do not advise to buy USD/CAD.

Sell Scenario: - The USD/CAD pair has retreated to 1.3535 after bouncing off the 100-day moving average, reflecting market nervousness ahead of the April jobs report from the US and Canada. Despite the 100-DMA providing support to the pair for the past two weeks, the MACD indicates a possible bearish cross, and the RSI remains steady, suggesting a possible breach of the 1.3525 DMA support. This could result in a swift decline towards the 61.8% Fibonacci retracement level at 1.3465. The USD/CAD bears may face resistance at the early April low of around 1.3400 and an upward-sloping support line from November 15, which currently stands at 1.3310. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -