Daily Analysis For USD/CAD  09-05-2023

Daily Analysis For USD/CAD 09-05-2023

USD/CAD Analysis
Economic Events and Scenario for USD/CAD
Economic Events : -
00:01(United Kingdom) BRC Retail Sales Monitor YoYHighGBP
00:30(Japan) Overtime Pay YoYLowJPY
00:30(Japan) Average Cash Earnings YoYLowJPY
00:30(Japan) Household Spending MoMLowJPY
00:30(Japan) Household Spending YoYLowJPY
01:00(Euro Area) Anniversary of Robert Schumans DeclarationNoneEUR
01:00(Luxembourg) Europe DayNoneEUR
02:30(Australia) Retail Sales MoMHighAUD
04:00(China) Exports YoYMediumCNY
04:00(China) Imports YoYMediumCNY
04:00(China) Balance of TradeHighCNY
04:35(Japan) 10-Year JGB AuctionLowJPY
04:35(Japan) 6-Month Bill AuctionLowJPY
07:00(Lithuania) CPILowEUR
07:00(Lithuania) Inflation Rate MoMLowEUR
07:00(Lithuania) Inflation Rate YoYLowEUR
07:00(United Kingdom) Halifax House Price Index YoYMediumGBP
07:00(United Kingdom) Halifax House Price Index MoMMediumGBP
07:45(France) Current AccountLowEUR
07:45(France) Balance of TradeMediumEUR
07:45(France) ExportsLowEUR
07:45(France) ImportsLowEUR
08:00(Slovakia) Balance of TradeLowEUR
08:30(France) Foreign Exchange ReservesLowEUR
09:00(Euro Area) ECB Lane SpeechLowEUR
09:40(Spain) 6-Month Letras AuctionLowEUR
09:40(Spain) 12-Month Letras AuctionLowEUR
10:30(Germany) 5-Year Bobl AuctionLowEUR
10:30(Australia) 2023-24 Federal BudgetMediumAUD
11:00(United Kingdom) BBA Mortgage RateLowGBP
11:00(Ireland) Industrial Production YoYLowEUR
11:00(United States) NFIB Business Optimism IndexLowUSD
13:30(United States) Fed Jefferson SpeechMediumUSD
13:55(United States) Redbook YoYLowUSD
14:00(France) 3-Month BTF AuctionLowEUR
14:00(France) 12-Month BTF AuctionLowEUR
14:00(France) 6-Month BTF AuctionLowEUR
15:00(United States) IBD/TIPP Economic OptimismMediumUSD
15:30(United States) NY Fed Treasury Purchases 0 to 1 yrsLowUSD
17:05(United States) Fed Williams SpeechMediumUSD
18:00(United States) 3-Year Note AuctionLowUSD
18:00(Euro Area) ECB Schnabel SpeechLowEUR
21:30(United States) API Crude Oil Stock ChangeMediumUSD

Today's Scenario: - During early Tuesday, USD/CAD fell to a new intraday low near 1.3365, unable to sustain the rebound it made at the start of the week. The pullback could be attributed to the US dollar struggling to maintain previous gains as markets adopt a cautious approach before the US debt-ceiling talks in the White House. Additionally, the mildly positive tone of WTI crude oil, which is a crucial export for Canada, also adds to the bearish pressure on the currency pair.
The US Dollar Index (DXY) retreats to 101.42, consolidating its intraday gains, which were not bolstered by the unimpressive details of the Federal Reserve's (Fed) quarterly bank loan survey. However, the greenback's decline is limited by optimistic US inflation expectations, as seen in the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data. The bullish sentiment is offset by concerns about the bleak economic outlook if the US fails to extend the debt ceiling.

Buy Scenario: - On the upside, if USD/CAD continues to rebound, it may target the 200-day moving average hurdle around 1.3450. However, buyers will require validation from the 100-day moving average level of about 1.3520 to aim for the previous monthly high of around 1.3670. If USD/CAD manages to remain strong beyond 1.3670, it could rally towards the yearly high of nearly 1.3860. Till we do not advise to buy USD/CAD.

Sell Scenario: - USD/CAD is trading around the 1.3370-80 level and struggling to hold on to the rebound seen on the previous day from the short-term key support line. Despite the recent lack of action, the Loonie pair is still off the bear's radar, supported by the Dragonfly bullish Doji candlestick posted on Monday and the nearly oversold RSI (14) conditions.
To maintain this positive outlook, USD/CAD needs to hold above the upward-sloping support line from November 2022, currently near 1.3315. Furthermore, the 1.3300 round figure also acts as downside support. In case of a breakdown below these levels, February's bottom at 1.3265 and the late 2022 trough around 1.3240 may also come into play. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -
S1 1.3331-R1 1.3404
S2 1.3286-R2 1.3432
S3 1.3258-R3 1.3476


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