Daily Analysis For USD/CAD  22-05-2023

Daily Analysis For USD/CAD 22-05-2023

USD/CAD Analysis
Economic Events and Scenario for USD/CAD
Economic Events : -
00:50(Japan) Machinery Orders YoYMediumJPY
00:50(Japan) Machinery Orders MoMMediumJPY
01:00(Canada) Victoria DayNoneCAD
01:00(Montenegro) Independence DayNoneEUR
02:15(China) Loan Prime Rate 1YMediumCNY
02:15(China) Loan Prime Rate 5YMediumCNY
05:30(Netherlands) Consumer ConfidenceMediumEUR
06:00(Estonia) PPI YoYLowEUR
06:00(Estonia) PPI MoMLowEUR
07:30(Switzerland) Industrial Production YoYMediumCHF
08:00(Slovakia) Current AccountLowEUR
09:00(Greece) Current AccountLowEUR
09:00(Australia) Myfxbook AUDUSD SentimentMediumAUD
09:00(Switzerland) Myfxbook USDCHF SentimentMediumCHF
09:00(Japan) Myfxbook USDJPY SentimentMediumJPY
09:00(European Union) Myfxbook EURUSD SentimentMediumEUR
09:00(United Kingdom) Myfxbook GBPUSD SentimentMediumGBP
09:00(Canada) Myfxbook USDCAD SentimentMediumCAD
09:00(New Zealand) Myfxbook NZDUSD SentimentMediumNZD
10:00(Belgium) Consumer ConfidenceLowEUR
10:00(Euro Area) Construction Output YoYLowEUR
10:45(European Union) EU Bond AuctionLowEUR
11:00(Ireland) Wholesale Prices MoMLowEUR
11:00(Ireland) Wholesale Prices YoYLowEUR
11:00(Luxembourg) Unemployment RateLowEUR
11:30(Portugal) Current AccountLowEUR
13:00(Kosovo) Balance of TradeLowEUR
13:30(United States) Fed Bullard SpeechMediumUSD
14:00(France) 3-Month BTF AuctionLowEUR
14:00(France) 12-Month BTF AuctionLowEUR
14:00(France) 6-Month BTF AuctionLowEUR
15:00(Euro Area) Consumer ConfidenceMediumEUR
15:50(United States) Fed Barkin SpeechMediumUSD
15:50(United States) Fed Bostic SpeechMediumUSD
16:30(United States) 3-Month Bill AuctionLowUSD
16:30(United States) 6-Month Bill AuctionLowUSD
20:00(El Salvador) Balance of TradeLowUSD

Today's Scenario: - USD/CAD is gaining strength from its intraday low as bearish momentum fails to sustain the first daily decline in three days. The pair found support at the 100-day moving average during the early Monday session.
The recent rebound in USD/CAD could be attributed to the weaker performance of WTI crude oil, which is Canada's main export. Crude oil prices have declined for the third consecutive day, with a 1.0% drop to around $71.15 at the moment. This decline aligns with expectations of increased oil production and concerns about slower economic growth. The US Energy Information Agency (EIA) stated in its monthly report that US crude oil production grew by 5.6% in 2022 compared to 2021, averaging 11.9 million barrels per day (bpd). The EIA highlighted increased production in the Permian region and the Federal Offshore Gulf of Mexico as the main drivers of this growth.
Meanwhile, the US Dollar Index (DXY) is trading around 103.00 after retracing from a two-month high reached the previous day. The index reflects the performance of the US dollar against six major currencies and is currently benefiting from cautious optimism regarding US policymakers' ability to address the debt ceiling issue, despite the recent failure of talks.

Buy Scenario: - On the upside, a daily close above the 100-DMA resistance at 1.3510 would not be enough to encourage bullish momentum, as a downward-sloping resistance line from March, around 1.3550, is likely to pose a significant challenge for buyers.
If USD/CAD manages to sustain gains above 1.3550, there is a possibility of a gradual ascent towards the previous monthly low around 1.3665.
Overall, USD/CAD is expected to trade sideways, but the bears have had the upper hand in recent times. Till we do not advise to buy USD/CAD.

Sell Scenario: - USD/CAD is trading near its intraday low around 1.3490 in early Monday trading in Europe. The pair's recent price action, including a Doji candlestick on Friday, a stable RSI (14) line, and bullish MACD signals, supports a sideways movement.
As a result, USD/CAD is expected to remain range-bound between the 100-day moving average (DMA) and the 200-DMA, which are located around 1.3510 and 1.3480, respectively.
If the pair breaks below the 1.3480 level, it may further strengthen the bearish bias, with a key support level found around a two-week-old upward-sloping trendline near 1.3475.
Subsequently, USD/CAD could decline towards the psychological level of 1.3400 and potentially reach the yearly low around 1.3300. Till we do not advise to sell USD/CAD.

Support and Resistance Level: -
S1 1.3474-R1 1.3530
S2 1.3444-R2 1.3554
S3 1.3419-R3 1.3585


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