USD/CAD extends downside to 1.3600 amid soft US Dollar

FXStreet
Updated May 28, 2024 05:48
Mitrade
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■USD/CAD edges down to 1.3600 as the US Dollar’s appeal is uncertain.

■US core PCE Price Index is projected to have grown steadily in April.

■Canada’s weak household spending and consistently easing price pressures prompt BoC rate-cut prospects.


The USD/CAD pair drops further to near the round-level support of 1.3600 in Tuesday’s Asian session. The Loonie asset is under pressure as the US Dollar (USD) weakens even though traders seethe Federal Reserve (Fed) keeping interest rates steady in the September meeting.


The market sentiment is upbeat despite the fact that rate-cuts from the Fed has been delayed. S&P 500 futures have posted some decent gains in the Tokyo session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, has extended its losing spell for the third trading session on Tuesday and has dropped to near 104.40.


10-year US Treasury yields falls further to 4.64% even though market speculation for Fed rate cuts in September has diminished. Historically, the scenario is favorable for yields on interest-bearing assets but they still struggle for a firm footing.


Going forward, the US Dollar will be guided by the United States (US) core Personal Consumption Expenditure Price Index (PCE) data for April, which will be published on Friday. The Fed’s preferred inflation measure is estimated to have grown steadily on monthly and annual basis at 0.3% and 2.8%, respectively. This would weaken the case of Fed rate cuts in September further.


Meanwhile, the Canadian Dollar is capitalizing on upbeat market sentiment. Th near-term outlook of the Canadian Dollar is uncertain as investors expect that the Bank of Canada (BoC) will start reducing interest rates from the June meeting.


Risks of Canada’s inflation remaining persistent have eased due to weak consumer spending and dismal economic outlook, prompting bets favoring rate cuts in June. This week, investors will focus on the Q1 Gross Domestic Product (GDP) data, which will indicate the economic health of Canada.


USD/CAD


Overview
Today last price 1.3621
Today Daily Change -0.0012
Today Daily Change % -0.09
Today daily open 1.3633
 
Trends
Daily SMA20 1.3675
Daily SMA50 1.3651
Daily SMA100 1.3569
Daily SMA200 1.3573
 
Levels
Previous Daily High 1.3671
Previous Daily Low 1.363
Previous Weekly High 1.3744
Previous Weekly Low 1.3596
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3645
Daily Fibonacci 61.8% 1.3655
Daily Pivot Point S1 1.3618
Daily Pivot Point S2 1.3603
Daily Pivot Point S3 1.3577
Daily Pivot Point R1 1.3659
Daily Pivot Point R2 1.3686
Daily Pivot Point R3 1.37

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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