Daily Analysis For USD/CAD  19-05-2023

Daily Analysis For USD/CAD 19-05-2023

USD/CAD Analysis
Economic Events and Scenario for USD/CAD
Economic Events : -
00:01(United Kingdom) Gfk Consumer ConfidenceHighGBP
00:30(Japan) Core Inflation Rate YoYMediumJPY
00:30(Japan) Inflation Rate MoMLowJPY
00:30(Japan) Inflation Rate YoYHighJPY
00:30(Japan) Inflation Rate Ex-Food and Energy YoYLowJPY
01:00(Belgium) Friday after Ascension DayNoneEUR
04:00(New Zealand) Credit Card Spending YoYLowNZD
04:35(Japan) 3-Month Bill AuctionLowJPY
05:30(Japan) Tertiary Industry Index MoMLowJPY
07:00(Germany) PPI YoYLowEUR
07:00(Germany) PPI MoMMediumEUR
08:00(Slovakia) Current AccountLowEUR
09:00(Greece) Current AccountLowEUR
09:00(Italy) Construction Output YoYLowEUR
09:30(Slovenia) PPI YoYLowEUR
10:00(Slovakia) Unemployment RateLowEUR
11:00(Spain) Consumer ConfidenceMediumEUR
12:00(Montenegro) Current AccountLowEUR
13:30(Canada) Retail Sales YoYHighCAD
13:30(Canada) Retail Sales Ex Autos MoMHighCAD
13:30(Canada) Retail Sales MoMHighCAD
13:45(United States) Fed Williams SpeechMediumUSD
14:00(United States) Fed Bowman SpeechMediumUSD
15:55(Euro Area) ECB Schnabel SpeechMediumEUR
16:00(United States) Fed Chair Powell SpeechHighUSD
18:00(United States) Baker Hughes Oil Rig CountLowUSD
18:00(United States) Baker Hughes Total Rig CountLowUSD
20:00(Euro Area) ECB President Lagarde SpeechMediumEUR

Today's Scenario: - The USD/CAD pair hovers around the significant level of 1.3500 as bulls and bears struggle amidst the recent weakening of the US Dollar and the rebound in WTI crude oil prices during early Friday trading in Europe. As a result, the pair reflects the cautious sentiment prevailing in the market ahead of important events.
At the same time, the US Dollar Index (DXY) fluctuates near its highest levels in two months, fueled by reports indicating that the US House Freedom Caucus could impede any agreement to raise the $31.4 trillion debt ceiling. This raises concerns about a potential US default and supports recent buying interest in the DXY. Additionally, the US-Taiwan trade deal poses a challenge for optimists, particularly with planned meetings between China's Commerce Minister Wang Wentao, USTR Tai, and US Commerce Secretary Gina Raimondo on the horizon.

Buy Scenario: - The USD/CAD pair is currently forming a Symmetrical Triangle chart pattern on an hourly timeframe, indicating a contraction in volatility. The Canadian dollar has encountered selling pressure as it attempted to break out of the neutral triangle. The downward-sloping trendline, originating from the high on April 28 at 1.3668, is acting as a significant resistance level for US dollar bulls.
The 20-period Exponential Moving Average (EMA) is situated near the current price of the pair at 1.3492, suggesting a lack of significant movement.
Additionally, the Relative Strength Index (RSI) (14) has retreated back into the range of 40.00-60.00, indicating that investors are awaiting a potential catalyst for a decisive breakout.
If the USD/CAD pair manages to surpass the resistance level of 1.3600, the upward bias will be reinforced. This could lead to a further rise towards the low on May 21 at 1.3644, followed by the round-level resistance at 1.3700. Till we do not advise to buy USD/CAD.

Sell Scenario: - On the other hand, a break below the low on May 18 at 1.3452 would diminish the upside bias and push the pair towards the low on April 4 at 1.3406, with further support at the low on May 8 at 1.3315. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -
S1 1.3460-R1 1.3536
S2 1.3416-R2 1.3569
S3 1.3383-R3 1.3613


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