Published on May 19, 2023

Daily Analysis For USD/CAD 19-05-2023

USD/CAD Analysis

Economic Events and Scenario for USD/CAD

Economic Events : -

GMT	Event	Impact	Currency
00:01	(United Kingdom) Gfk Consumer Confidence	High	GBP
00:30	(Japan) Core Inflation Rate YoY	Medium	JPY
00:30	(Japan) Inflation Rate MoM	Low	JPY
00:30	(Japan) Inflation Rate YoY	High	JPY
00:30	(Japan) Inflation Rate Ex-Food and Energy YoY	Low	JPY
01:00	(Belgium) Friday after Ascension Day	None	EUR
04:00	(New Zealand) Credit Card Spending YoY	Low	NZD
04:35	(Japan) 3-Month Bill Auction	Low	JPY
05:30	(Japan) Tertiary Industry Index MoM	Low	JPY
07:00	(Germany) PPI YoY	Low	EUR
07:00	(Germany) PPI MoM	Medium	EUR
08:00	(Slovakia) Current Account	Low	EUR
09:00	(Greece) Current Account	Low	EUR
09:00	(Italy) Construction Output YoY	Low	EUR
09:30	(Slovenia) PPI YoY	Low	EUR
10:00	(Slovakia) Unemployment Rate	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
12:00	(Montenegro) Current Account	Low	EUR
13:30	(Canada) Retail Sales YoY	High	CAD
13:30	(Canada) Retail Sales Ex Autos MoM	High	CAD
13:30	(Canada) Retail Sales MoM	High	CAD
13:45	(United States) Fed Williams Speech	Medium	USD
14:00	(United States) Fed Bowman Speech	Medium	USD
15:55	(Euro Area) ECB Schnabel Speech	Medium	EUR
16:00	(United States) Fed Chair Powell Speech	High	USD
18:00	(United States) Baker Hughes Oil Rig Count	Low	USD
18:00	(United States) Baker Hughes Total Rig Count	Low	USD
20:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR

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: -