USDCAD could bounce depending on data
The greenback hasn’t appreciated significantly against the loonie in June so far despite generally gaining elsewhere and fairly mixed economic data from Canada. The main reason for that appears to be oil’s recovery, with American light oil now above $80. Retail sales in Canada have declined in recent months while producer prices have increased, so the Bank of Canada is somewhat reluctant to push ahead with more cuts to the target overnight rate, which was decreased to 4.75% on 5 June.
Although the trend was definitely upward in the first quarter and until the middle of April, the price hasn’t made a new high since then. ATR declined sharply last week and the faster moving averages have bunched quite closely together. If there’s a break below the 50 SMA from Bands, it’d be possible to see a retest of the 100 SMA around $1.364 or maybe as far as May’s lows near $1.36. A move below there seems questionable though unless oil continues to make significant gains or expectations for the Fed shift significantly.
$1.37 doesn’t appear to be a strong resistance, so despite the presence of the 20 SMA there the next significant resistance on the daily chart is probably $1.378. The slow stochastic is closer to oversold than neutral, but just barely, so there’s unlikely to be a signal of saturation within the next few days. The next significant movement probably depends on data, primarily Canadian inflation on Tuesday and American PCE on Friday.
This is my personal opinion which does not reflect the opinion of Exness. This is not a recommendation to trade.
Although the trend was definitely upward in the first quarter and until the middle of April, the price hasn’t made a new high since then. ATR declined sharply last week and the faster moving averages have bunched quite closely together. If there’s a break below the 50 SMA from Bands, it’d be possible to see a retest of the 100 SMA around $1.364 or maybe as far as May’s lows near $1.36. A move below there seems questionable though unless oil continues to make significant gains or expectations for the Fed shift significantly.
$1.37 doesn’t appear to be a strong resistance, so despite the presence of the 20 SMA there the next significant resistance on the daily chart is probably $1.378. The slow stochastic is closer to oversold than neutral, but just barely, so there’s unlikely to be a signal of saturation within the next few days. The next significant movement probably depends on data, primarily Canadian inflation on Tuesday and American PCE on Friday.
This is my personal opinion which does not reflect the opinion of Exness. This is not a recommendation to trade.
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