Published on May 16, 2023

Daily Analysis For USD/CAD 16-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
01:30	(Australia) Westpac Consumer Confidence Index	High	AUD
01:30	(Australia) Westpac Consumer Confidence Change	High	AUD
02:30	(Australia) RBA Meeting Minutes	High	AUD
03:00	(China) Unemployment Rate	High	CNY
03:00	(China) Retail Sales YoY	High	CNY
03:00	(China) Industrial Production YoY	High	CNY
03:00	(China) Fixed Asset Investment (YTD) YoY	Medium	CNY
06:00	(Finland) GDP YoY	Low	EUR
06:00	(Finland) GDP Growth Rate QoQ	Low	EUR
06:00	(Finland) GDP Growth Rate YoY	Low	EUR
07:00	(United Kingdom) HMRC Payrolls Change	Low	GBP
07:00	(United Kingdom) Average Earnings excl. Bonus (3Mo/Yr)	Low	GBP
07:00	(United Kingdom) Average Earnings incl. Bonus (3Mo/Yr)	Medium	GBP
07:00	(United Kingdom) Unemployment Rate	High	GBP
07:00	(United Kingdom) Claimant Count Change	High	GBP
07:00	(United Kingdom) Employment Change	High	GBP
07:00	(United Kingdom) Labour Productivity QoQ	Low	GBP
08:00	(China) FDI (YTD) YoY	Medium	CNY
08:00	(Slovakia) GDP Growth Rate YoY	Low	EUR
08:00	(Slovakia) GDP Growth Rate QoQ	Low	EUR
08:30	(Netherlands) Household Consumption YoY	Low	EUR
08:30	(Netherlands) GDP Growth Rate QoQ	Medium	EUR
08:30	(Netherlands) GDP Growth Rate YoY	Medium	EUR
08:30	(Netherlands) Balance of Trade	Low	EUR
09:00	(European Union) ECOFIN Meeting	Medium	EUR
09:00	(France) IEA Oil Market Report	Medium	EUR
09:00	(Italy) Inflation Rate MoM	Low	EUR
09:00	(Italy) Harmonised Inflation Rate MoM	Low	EUR
09:00	(Italy) Inflation Rate YoY	Medium	EUR
09:00	(Italy) Harmonised Inflation Rate YoY	Low	EUR
09:00	(Italy) CPI	High	EUR
09:40	(Spain) 3-Month Letras Auction	Low	EUR
10:00	(Cyprus) GDP Growth Rate YoY	Low	EUR
10:00	(Cyprus) GDP Growth Rate QoQ	Low	EUR
10:00	(Euro Area) GDP Growth Rate YoY	Medium	EUR
10:00	(Euro Area) GDP Growth Rate QoQ	Medium	EUR
10:00	(Euro Area) Employment Change QoQ	High	EUR
10:00	(Euro Area) Employment Change YoY	High	EUR
10:00	(Euro Area) Balance of Trade	Medium	EUR
10:00	(Euro Area) ZEW Economic Sentiment Index	Medium	EUR
10:00	(Germany) ZEW Current Conditions	Low	EUR
10:00	(Germany) ZEW Economic Sentiment Index	High	EUR
10:00	(Montenegro) Inflation Rate MoM	Low	EUR
10:00	(Montenegro) Harmonised Inflation Rate YoY	Low	EUR
10:00	(Montenegro) Inflation Rate YoY	Low	EUR
13:15	(United States) Fed Mester Speech	Medium	USD
13:30	(Canada) Manufacturing Sales MoM	Low	CAD
13:30	(Canada) Core Inflation Rate MoM	Low	CAD
13:30	(Canada) Core Inflation Rate YoY	Medium	CAD
13:30	(Canada) Inflation Rate MoM	Medium	CAD
13:30	(Canada) Inflation Rate YoY	High	CAD
13:30	(Canada) CPI Trimmed-Mean YoY	High	CAD
13:30	(Canada) CPI Median YoY	High	CAD
13:30	(United States) Retail Sales Ex Gas/Autos MoM	High	USD
13:30	(United States) Retail Sales YoY	High	USD
13:30	(United States) Retail Sales Ex Autos MoM	High	USD
13:30	(United States) Retail Sales MoM	High	USD
13:55	(United States) Redbook YoY	Low	USD
13:55	(United States) Fed Bostic Speech	Medium	USD
14:15	(United States) Manufacturing Production MoM	Low	USD
14:15	(United States) Industrial Production MoM	Medium	USD
14:15	(United States) Industrial Production YoY	Medium	USD
14:15	(United States) Manufacturing Production YoY	Low	USD
14:15	(United States) Capacity Utilization	Low	USD
14:45	(Euro Area) ECB Tuominen Speech	Low	EUR
15:00	(United States) Retail Inventories Ex Autos MoM	Low	USD
15:00	(United States) Business Inventories MoM	Medium	USD
15:00	(United States) NAHB Housing Market Index	Medium	USD
15:00	(United States) Fed Barr Testimony	Medium	USD
15:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR
16:00	(New Zealand) Global Dairy Trade Price Index	Low	NZD
16:30	(United States) 52-Week Bill Auction	Low	USD
17:15	(United States) Fed Williams Speech	Medium	USD
20:15	(United States) Fed Logan Speech	Medium	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - The USD/CAD pair is relatively stable around 1.3470 as it enters Tuesday's European session, following a lackluster start to the week. This reflects the cautious sentiment among traders ahead of significant data and events in both the US and Canada, causing mixed market sentiment.

The uncertainty surrounding US policymakers' preparedness to address the debt ceiling expiration has led to a sense of caution in global markets. President Joe Biden and House Speaker Kevin McCarthy are set to engage in crucial negotiations scheduled for 19:00 GMT. McCarthy's recent remarks stating, "I don't think we're in a good place," have contributed to a sense of stability in the US Dollar's value. This is due to concerns about a potential deadlock in extending the US debt ceiling, as Republicans may remain steadfast in their demands.

Buy Scenario: - On the other hand, if the USD/CAD pair stages a recovery, it could target the hurdle of the 50-DMA around 1.3560 before encountering a descending resistance line that has been in place for the past 10 weeks, situated near 1.3585 at the moment.

Should the quote remain stronger beyond 1.3585, the previous monthly high around 1.3665 will be crucial for buyers of the Loonie pair before aiming for the late March swing high of 1.3805. Till we do not advise to buy USD/CAD.

Sell Scenario: - The bears in the USD/CAD pair are hovering around the 200-day moving average (DMA) near 1.3465 as they take a pause following the pair's largest daily decline in over a week, coinciding with the release of US Retail Sales and Canadian inflation data.

After reversing from the 50-DMA on the previous day, the pair ended its two-day upward trend. However, the subsequent decline did not receive significant support from the Moving Average Convergence Divergence (MACD), leading to a struggle for USD/CAD bears near the 200-DMA support at around 1.3465-60 at the current time.

If the price breaks below the key support of the 200-DMA, there is an upward-sloping support line originating from early February, which currently lies near 1.3365. It's important to note that the round figure of 1.3400 may act as a temporary pause between the key DMA and the mentioned support line.

In the event that the USD/CAD bears maintain control below 1.3365, the possibility of a decline towards the yearly low recorded in February around 1.3260 cannot be ruled out. However, the lows marked in April and mid-February, approximately at 1.3340 and 1.3270 respectively, may provide some resistance for sellers. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -