Published on May 12, 2023

Daily Analysis For USD/CAD 12-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
04:00	(New Zealand) Business Inflation Expectations	Low	NZD
04:35	(Japan) 3-Month Bill Auction	Low	JPY
06:00	(Finland) Current Account	Low	EUR
07:00	(United Kingdom) Goods Trade Balance	High	GBP
07:00	(United Kingdom) GDP YoY	Low	GBP
07:00	(United Kingdom) Goods Trade Balance Non-EU	High	GBP
07:00	(United Kingdom) Industrial Production MoM	Medium	GBP
07:00	(United Kingdom) Industrial Production YoY	Low	GBP
07:00	(United Kingdom) Manufacturing Production MoM	Medium	GBP
07:00	(United Kingdom) Manufacturing Production YoY	Low	GBP
07:00	(United Kingdom) Construction Output YoY	Low	GBP
07:00	(United Kingdom) Balance of Trade	Low	GBP
07:00	(United Kingdom) GDP Growth Rate YoY	High	GBP
07:00	(United Kingdom) GDP Growth Rate QoQ	High	GBP
07:00	(United Kingdom) Business Investment QoQ	Medium	GBP
07:00	(United Kingdom) Business Investment YoY	Low	GBP
07:00	(United Kingdom) GDP MoM	High	GBP
07:00	(United Kingdom) GDP 3-Month Avg	Medium	GBP
07:00	(United Kingdom) Construction Orders YoY	Low	GBP
07:45	(France) Inflation Rate YoY	Medium	EUR
07:45	(France) Inflation Rate MoM	Medium	EUR
07:45	(France) Harmonised Inflation Rate MoM	Low	EUR
07:45	(France) Harmonised Inflation Rate YoY	Low	EUR
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Spain) CPI	High	EUR
08:00	(Spain) Core Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate YoY	Low	EUR
08:00	(Spain) Inflation Rate MoM	Low	EUR
08:00	(Spain) Harmonised Inflation Rate YoY	Low	EUR
08:00	(Spain) Harmonised Inflation Rate MoM	Low	EUR
08:00	(United States) Fed Bowman Speech	Medium	USD
09:00	(Euro Area) ECB Guindos Speech	High	EUR
10:00	(China) Current Account	Medium	CNY
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Current Account	Low	EUR
12:15	(United Kingdom) BoE Pill Speech	Medium	GBP
13:00	(United Kingdom) NIESR Monthly GDP Tracker	Low	GBP
13:30	(United States) Export Prices YoY	Low	USD
13:30	(United States) Import Prices YoY	Low	USD
13:30	(United States) Import Prices MoM	Medium	USD
13:30	(United States) Export Prices MoM	Medium	USD
13:45	(Germany) Current Account	Low	EUR
14:00	(Ecuador) Balance of Trade	Low	USD
15:00	(United States) Michigan Consumer Sentiment	High	USD
15:00	(United States) Michigan Inflation Expectations	Low	USD
15:00	(United States) Michigan Consumer Expectations	Low	USD
15:00	(United States) Michigan 5 Year Inflation Expectations	Low	USD
15:00	(United States) Michigan Current Conditions	Low	USD
15:30	(Canada) Senior Loan Officer Survey	Medium	CAD
17:00	(United States) WASDE Report	Low	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD

Today's Scenario: - The USD/CAD bulls are pausing near 1.3490 in the early hours of Friday, following the significant daily increase observed the day before, which was the largest in nine weeks. However, despite the retreat of the US Dollar, the pair is unable to find support as oil prices continue to remain bearish. The buyers remain optimistic due to the cautious market sentiment surrounding the upcoming US inflation data, as well as concerns arising from the US debt ceiling negotiations and recent banking issues.

Buy Scenario: - From a technical standpoint, if the USD/CAD pair continues to move higher, it is likely to encounter strong resistance near the 100-day Simple Moving Average (SMA), which is currently positioned just above the 1.3500 level. A sustained upward momentum would set the stage for an extension of the recent bounce from around the 1.3300 area. In such a scenario, the pair could target the intermediate resistance zone around 1.3545-1.3550 and potentially reclaim the psychological level of 1.3600. Further upside momentum could take the pair towards the supply zone of 1.3635-1.3640, with the April swing high near the 1.3665-1.3670 area and the 1.3700 mark serving as additional targets. Till we do not advise to buy USD/CAD.

Sell Scenario: - On the downside, if weakness persists and the pair falls below the 1.3475 level, which marked the low during the Asian session, it could attract fresh buying interest near the 1.3410-1.3400 region. This region is expected to act as a crucial support level, and a decisive break below it would make the USD/CAD pair more vulnerable to further downside. In such a scenario, the pair may weaken further, targeting the intermediate support around 1.3365 and potentially testing the strong horizontal support zone of 1.3315-1.3300. A continuation of selling pressure would signal bearish momentum and potentially lead to a further near-term depreciation of the pair. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -