USD/CAD advances toward weekly high near 1.3740 amid firm US Dollar

FXStreet
Updated May 30, 2024 05:44
Mitrade
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Source: DepositPhotos

■USD/CAD marches toward 1.3740, strengthen by the strong US Dollar.

■The US Dollar strengthens amid caution ahead of the US core PCE Inflation data.

■Canadian monthly and Q1 GDP data will exhibit its economic health.


The USD/CAD pair establishes itself above the round-level resistance of 1.3700 in Thursday’s Asian session. The Loonie asset aims to recapture weekly high near 1.3740 as the US Dollar strengthens. Strong demand of the US Dollar is driven by a sharp decline in traders’ bets for the Federal Reserve (Fed) reducing interest rates from the September meeting.


Investors remain risk-averse amid fears of the Fed delaying rate-cuts to the last quarter of the year. S&P 500 futures have posted significant losses in the Tokyo session, reflecting a sharp decline in investors’ risk-appetite. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps above the critical resistance of 105.00.


The scenario of higher interest rates by the Fed for a longer period bodes well for the yields on interest-bearing assets. 10-year US Treasury yields are slightly down to 4.61% but is close to almost four-week high.


Meanwhile, investors await the United States core Personal Consumption Expenditure Price Index (PCE) data for April, which will significantly influence speculation for Fed rate cuts in September. The underlying inflation data is scheduled to be published on Friday. Annual and monthly core PCE inflation readings are estimated to have grown steadily by 2.8% and 0.3% respectively.


On the Canadian Dollar front, investors await the Gross Domestic Product (GDP) data for different timeframes, which will be published on Friday. On a month-on-month basis, the Canadian economy is projected to have remained stagnant after expanding 0.2% in February. For the first quarter of the year, the economy is forecasted to have expanded by 2.2% on an annualized basis. Weak GDP numbers would prompt the likelihood of the Bank of Canada (BoC) to begin reducing interest rates from the June meeting.


USD/CAD


Overview
Today last price 1.3724
Today Daily Change 0.0006
Today Daily Change % 0.04
Today daily open 1.3718
 
Trends
Daily SMA20 1.3667
Daily SMA50 1.3657
Daily SMA100 1.3575
Daily SMA200 1.3574
 
Levels
Previous Daily High 1.372
Previous Daily Low 1.3641
Previous Weekly High 1.3744
Previous Weekly Low 1.3596
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.369
Daily Fibonacci 61.8% 1.3671
Daily Pivot Point S1 1.3666
Daily Pivot Point S2 1.3615
Daily Pivot Point S3 1.3588
Daily Pivot Point R1 1.3745
Daily Pivot Point R2 1.3771
Daily Pivot Point R3 1.3823

* 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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