#USDCAD @ 1.34166 The pair fell to its lowest level since May 11 at 1.3390. (Pivot Orderbook analysis)
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- The USD/CAD pair fell to its lowest level since May 11 at 1.3390.
- Investors await BoC’s decision, expected to maintain rates at 4.5%.
- Canadian yields increase, giving support to the CAD.
The pair currently trades last at 1.34166.
The previous day high was 1.3462 while the previous day low was 1.3418. The daily 38.2% Fib levels comes at 1.3445, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3434, expected to provide resistance.
The USD/CAD stretched lower on Tuesday trading in the 1.3389 – 1.3452 range despite the US dollar maintaining its foot versus other peers, with the DXY index trading with gains at the 104.20 level. Ahead of Wednesday’s Bank of Canada (BoC) interest rate decision, Canadian yields are edging higher, giving the Canadian Dollar traction.
On Wednesday, investors will eye BoC’s interest rate decision where Governor Tiff Macklem and the rest of the policymakers are expected to keep interest rates at 4.5%. In that sense, the clear deceleration in the previous inflation figures gives room for the BoC to keep rates steady. In addition, the Canadian Ivey PMI came in weak in May, retreating to 53.5 vs the 57.2 expected, supporting expectations of a no-hike as economic activity shows weakness.
Meanwhile, Canadian bond yields are advancing across the curve. The 10-year bond yield rose to 3.33%, while the 2-year yield stands at 4.42% and the 5-year yield stands at 3.57%.
Taking into account the upcoming Federal Reserve (Fed) decision, according to the CME FedWatch Tool, investors are betting on a 73.6% probability of the Fed not hiking rates at their next meeting in June and maintaining the target rate at 5.25%. However, the decision will rely heavily on upcoming May Consumer Price Index (CPI) data, where the headline inflation is expected to decelerate to 4.2% (YoY) from 4.9%, while the Core rate to accelerate to 5.6% (YoY) from the last 5.5% reading. In that sense, the expectations of the upcoming decision may have an impact on the US Dollar.
Technically speaking, the USD/CAD maintains a bearish outlook for the short term, as per indicators on the daily chart. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both showing weakness standing in negative territory, and the pair trades below its main moving averages indicating that the sellers have the upper hand. The shorter-term charts as the 4-hour also suggest bears’ dominance with technical indicators deep in the red.
On the downside, the next support levels to watch are the daily low at the 1.3389 zone, followed by the 1.3350 and 1.3335 areas. On the other hand, a move above the 1.3450 zone may reignite the bulls’ momentum, with next resistances at 1.3470 and the convergence of the 20-,100- and 200-day Simple Moving Averages (SMAs) around the 1.3500 area.
Technical Levels: Supports and Resistances
USDCAD currently trading at 1.3414 at the time of writing. Pair opened at 1.3445 and is trading with a change of -0.23 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.3414 |
| 1 | Today Daily Change | -0.0031 |
| 2 | Today Daily Change % | -0.2300 |
| 3 | Today daily open | 1.3445 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3508, 50 SMA 1.3502, 100 SMA @ 1.3518 and 200 SMA @ 1.3509.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.3508 |
| 1 | Daily SMA50 | 1.3502 |
| 2 | Daily SMA100 | 1.3518 |
| 3 | Daily SMA200 | 1.3509 |
The previous day high was 1.3462 while the previous day low was 1.3418. The daily 38.2% Fib levels comes at 1.3445, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3434, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 1.3421, 1.3397, 1.3377
- Pivot resistance is noted at 1.3465, 1.3486, 1.351
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.3462 |
| Previous Daily Low | 1.3418 |
| Previous Weekly High | 1.3651 |
| Previous Weekly Low | 1.3407 |
| Previous Monthly High | 1.3655 |
| Previous Monthly Low | 1.3315 |
| Daily Fibonacci 38.2% | 1.3445 |
| Daily Fibonacci 61.8% | 1.3434 |
| Daily Pivot Point S1 | 1.3421 |
| Daily Pivot Point S2 | 1.3397 |
| Daily Pivot Point S3 | 1.3377 |
| Daily Pivot Point R1 | 1.3465 |
| Daily Pivot Point R2 | 1.3486 |
| Daily Pivot Point R3 | 1.3510 |
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