- USD/CAD jumped to a daily high of 1.3384 following four days of losses.
- Strong Dollar and falling Oil prices weigh on the CAD.
- All eyes are on Tuesday’s inflation data from the US.
During Monday’s session, the USD/CAD cut a four-day losing streak jumping to a daily high of 1.3384 as the US Dollar held its footing ahead of an eventful week. On the other hand, the Lonnie seems to be suffering from the plunge in Oil prices which have seen losses of more than 3% on the day.
Attention shifts to CPI data and Fed decision
Markets seem to be awaiting the upcoming release of the US Consumer Price Index (CPI) data for May to define direction. It is anticipated that the headline figure will show a slowdown to a year-on-year (YoY) rate of 4.1%, while the Core measure is expected to decline from the previous 5.5% YoY to 5.3%.
In addition, the CME FedWatch Tool, currently suggests a 25% chance of an interest rate hike for the upcoming Wednesday’s Federal Reserve (Fed) decision. Moreover, rate cuts are no longer anticipated by the end of the year, so market participants will keep an eye on Fed Chair Powell’s presser on Wednesday looking for clues regarding forward guidance
On the Canadian side, the CAD bulls seem to have taken a step back and are consolidating gains from last week’s Bank of Canada (BoC) surprising 25 basis point (bps) hike. Moreover, the Loonie seems to be facing further weakness amid Oil’s heavy losses as the WTI (Western Texas Intermediate) is down by 3.60% on the day, trading at the $67.45 level.
USD/CAD levels to watch
According to the daily chart, the USD/CAD shows a neutral to bearish perspective for the short term. Despite indicators having gained some traction, they are still operating in negative territory. The Relative Strength Index (RSI) sits below its midline but exhibits a positive slope. while, the Moving Average Convergence Divergence (MACD) printed a decreasing red bar, indicating diminishing selling momentum.
The 1.3350 zone level is key for USD/CAD to maintain its upside bias. If breached, the price could see a steeper decline towards the 1.3310 area and towards the multi-month low at 1.3300. Furthermore, upcoming resistance for USD/CAD is seen at the zone at 1.3380 level, followed by the psychological mark at 1.3400 and the 1.3450 area.
USD/CAD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats from post-NFP highs
EUR/USD jumped towards 1.0900 after a disappointing US Nonfarm Payrolls report but retreated after the dust settled. The country added just 12,000 new jobs in the month, much worse than the 113,000 anticipated.
GBP/USD trims losses and regain some poise on USD weakness
GBP/USD advanced towards the current 1.2950 region after closing deep in the red on Thursday. A tepid US employment report pushed investors away from the US Dollar, helping the battered Pound.
Gold ticks higher after US NFP data
Gold extends its early recovery, holding above the $2,750 mark after a tepid US Nonfarm Payrolls report. The uncertainties surrounding the US presidential election and the ongoing geopolitical tensions in the Middle East provide some support to the precious metal.
Bitcoin Weekly Forecast: Run toward fresh all-time high hinges on US presidential election results
Bitcoin could experience a price pullback in the next few days ahead of the US presidential election, analysts say, an event that will be key to determining whether and how the crypto class will be regulated in the years to come.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.