2020-06-03 • Updated
CAD will get fresh volatility after BOC statement on June 3 at 17:00 MT time.
The Canadian dollar has enormously outperformed the US dollar. Just look at this swing below!
USD/CAD broke through the 100-day moving average(MA). Now it’s headed towards the 200-day MA at 1.345. If it manages to break through it, it will dip down to 1.33. Resistance levels are 1.38 and 1.4.
The loonie gained on surge of oil prices. The oil market has shown significant recovery. It’s trading at $35. Of course, it’s well below the pre-crisis levels, but the outlook is promising as OPEC+ may expand supply cuts further.
Violent protests in the USA pushed the US dollar down. As a result, investors have doubts about the future US recovery soon. That’s why CAD turned out to be in a win position.
Monday data showed that Canada’s Manufacturing PMI rebounded from 33 in April to 40.6 in May. Numbers are still below 50.0, what means the economy hasn’t recovered yet completely, but things are getting better in Canada.
The markets shrugged off worries about US-China tensions. Instead of it, traders focus on the coronavirus recovery and easing of lockdowns. As a result, the Canadian dollar become favorable as a risk-on currency.
The Bank of Canada’s new chief, Tiff Macklem, will probably leave the rate unchanged at a record low of 0.25% during the meeting on June 3. Some analysts say that Macklem can impose some extra asset purchases to support economic activity with additional liquidity. Others think, he will take a wait-and-see approach and hold its ammunition for a rainy day, when the new money injection really is needed.
The main focus will be on the central bank’s guidance. Investors will look for hints on the future recovery under the new governor.
If the BOC gives optimistic outlook, CAD may go up.
Otherwise, if the BOC’ forecast is uncertain and dark, CAD can go down.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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