Canadian Dollar loses ground below 1.3650, eyes on Canadian CPI data

Source Fxstreet
May 21, 2024 07:11
  • USD/CAD edges higher to 1.3630 amid the modest rebound in USD on Tuesday.
  • The higher bets on rate cuts from the BoC and the decline in oil prices weigh on the Loonie.
  • The higher-for-longer US rate narrative is likely to cap the pair’s downside in the near term.

The USD/CAD pair trades in positive territory for the second consecutive day around 1.3630 on Tuesday during the early European session. Market players await the remarks from more FOMC members. Also, the Canadian CPI inflation report for April will be in the spotlight. 

The markets expect further cooling of CPI inflation figures on both an annual and monthly basis to convince the Bank of Canada (BOC) to cut interest rates next month. The Canadian central bank is anticipated to cut interest rates 2-3 times before the Fed's first rate cut, which might weigh on the Loonie and create a tailwind for the USD/CAD pair. Canada’s CPI inflation is expected to ease to 2.7% YoY in April from 2.9% in the previous reading, while the monthly CPI inflation is estimated to drop to 0.5% MoM in April from 0.6% in March. 

Meanwhile, the decline in crude oil exerts some selling pressure on the commodity-linked Canadian Dollar (CAD), as Canada is the leading exporter of oil to the United States.

On the other hand, US Federal Reserve (Fed) officials remain cautious about the timing of its easing cycle, emphasizing the need to keep interest rates higher for extended periods of time to gain confidence that inflation is on track to meet its objective. This, in turn, might lift the Greenback and cap the pair’s downside for the time being.

USD/CAD

Overview
Today last price 1.3634
Today Daily Change 0.0009
Today Daily Change % 0.07
Today daily open 1.3625
 
Trends
Daily SMA20 1.3674
Daily SMA50 1.3635
Daily SMA100 1.3553
Daily SMA200 1.3569
 
Levels
Previous Daily High 1.3635
Previous Daily Low 1.3596
Previous Weekly High 1.3691
Previous Weekly Low 1.359
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.362
Daily Fibonacci 61.8% 1.3611
Daily Pivot Point S1 1.3602
Daily Pivot Point S2 1.358
Daily Pivot Point S3 1.3563
Daily Pivot Point R1 1.3642
Daily Pivot Point R2 1.3658
Daily Pivot Point R3 1.3681

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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