Published on May 10, 2023

Daily Analysis For USD/CAD 10-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
00:50	(Japan) Foreign Exchange Reserves	Low	JPY
01:00	(El Salvador) Mothers' Day	None	USD
05:30	(Netherlands) Manufacturing Production MoM	Low	EUR
06:00	(Estonia) Balance of Trade	Low	EUR
06:00	(Finland) Industrial Production YoY	Low	EUR
06:00	(Japan) Coincident Index	Low	JPY
06:00	(Japan) Leading Economic Index	Low	JPY
07:00	(Germany) Harmonised Inflation Rate YoY	Low	EUR
07:00	(Germany) Harmonised Inflation Rate MoM	Low	EUR
07:00	(Germany) Inflation Rate MoM	Medium	EUR
07:00	(Germany) Inflation Rate YoY	Medium	EUR
07:00	(Germany) CPI	High	EUR
07:00	(Lithuania) Balance of Trade	Low	EUR
08:00	(Austria) Industrial Production YoY	Low	EUR
08:00	(Slovakia) Industrial Production YoY	Low	EUR
09:00	(Italy) Industrial Production YoY	Low	EUR
09:00	(Italy) Industrial Production MoM	Medium	EUR
09:30	(Slovenia) Industrial Production YoY	Low	EUR
10:00	(Belgium) Industrial Production MoM	Low	EUR
10:00	(Belgium) Industrial Production YoY	Low	EUR
10:00	(Cyprus) Balance of Trade	Low	EUR
10:00	(Greece) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Greece) Inflation Rate YoY	Low	EUR
10:00	(Greece) Inflation Rate MoM	Low	EUR
10:00	(Greece) Industrial Production YoY	Low	EUR
10:00	(Malta) Balance of Trade	Low	EUR
10:00	(United Kingdom) 10-Year Treasury Gilt Auction	Low	GBP
10:10	(Italy) 12-Month BOT Auction	Low	EUR
10:30	(Germany) 30-Year Bund Auction	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Balance of Trade	Low	EUR
11:00	(Portugal) Balance of Trade	Low	EUR
11:00	(Portugal) Unemployment Rate	Low	EUR
12:00	(United States) MBA 30-Year Mortgage Rate	Medium	USD
12:00	(United States) MBA Mortgage Applications	Low	USD
12:00	(United States) MBA Mortgage Refinance Index	Low	USD
12:00	(United States) MBA Mortgage Market Index	Low	USD
12:00	(United States) MBA Purchase Index	Low	USD
13:30	(Canada) Building Permits MoM	Low	CAD
13:30	(United States) Inflation Rate MoM	Medium	USD
13:30	(United States) Core Inflation Rate MoM	Medium	USD
13:30	(United States) Inflation Rate YoY	High	USD
13:30	(United States) Core Inflation Rate YoY	High	USD
13:30	(United States) CPI	High	USD
13:30	(United States) CPI s.a	High	USD
15:30	(United States) EIA Refinery Crude Runs Change	Low	USD
15:30	(United States) EIA Crude Oil Stocks Change	Medium	USD
15:30	(United States) EIA Distillate Stocks Change	Low	USD
15:30	(United States) EIA Heating Oil Stocks Change	Low	USD
15:30	(United States) EIA Gasoline Production Change	Low	USD
15:30	(United States) EIA Crude Oil Imports Change	Low	USD
15:30	(United States) EIA Gasoline Stocks Change	Medium	USD
15:30	(United States) EIA Cushing Crude Oil Stocks Change	Low	USD
15:30	(United States) EIA Distillate Fuel Production Change	Low	USD
16:30	(United States) 17-Week Bill Auction	Low	USD
17:00	(Canada) 2-Year Bond Auction	Low	CAD
18:00	(United States) 10-Year Note Auction	Low	USD
19:00	(United States) Monthly Budget Statement	Medium	USD
23:45	(New Zealand) Food Inflation YoY	Low	NZD

Today's Scenario: - The USD/CAD pair is currently approaching the key resistance level of 1.3400 in early European trading. The Canadian dollar has received considerable buying interest after successfully defending its critical support level of 1.3374. The US Dollar Index (DXY) has rebounded, and a correction in oil prices has also lent support to the Canadian dollar.

Investor sentiment has turned cautious ahead of the release of the US Consumer Price Index (CPI) data, leading to a risk-off market mood. S&P500 futures have given up some of their gains from the Asian session. Concerns over the US debt ceiling crisis have also contributed to the negative sentiment, as negotiations between the White House and Republican leaders have been adjourned until Friday. These factors have led to selling pressure on US equities on Tuesday.

Buy Scenario: - If USD/CAD manages to break above the 1.3410 resistance level, the 200-SMA and a five-week-old horizontal area near 1.3510 and 1.3530 could limit further upside moves. A downward-sloping resistance line from March 10, currently near 1.3620, could serve as the last line of defense for USD/CAD bears. Till we do not advise to buy USD/CAD.

Sell Scenario: - Aside from market risk factors, USD/CAD is facing resistance at a horizontal level that has been in place since early April around 1.3405-10, which is causing downward pressure on the currency pair. Additionally, the RSI (14) has rebounded from oversold levels and the MACD signals are weak, which is encouraging buyers to enter the market.

The next support level for USD/CAD is expected to be around the one-month-old horizontal support zone at 1.3315-3300, followed by the February and late 2022 lows around 1.3260 and 1.3225, respectively. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -