Let’s find out what has been moving the market today…
Trading plan for June 7
Although Wednesday’s US economic data were positive, the greenback continues to lose positions. The US dollar index declined to the support at $93.50. No significant data will be released on Thursday. As a result, there are risks of the further fall.
On Wednesday, the US dollar strongly depreciated against the Canadian dollar. The weakening greenback and encouraging Canadian economic data caused the USD/CAD pair’s fall. USD/CAD broke the support at 1.2930 (50.0 Fibo level) and tested the next support at 1.2860. The further direction of the pair will depend on Wednesday’s crude oil inventories data. If the figure is negative, the oil will increase, and as a result, the Canadian dollar will rise. Moreover, on Thursday, investors will take into consideration a speech of the Bank of Canada Governor Mr. Poloz (18:15 MT time). If the Governor gives some positive clues on the future monetary policy, the Canadian dollar will be able to strengthen more. Moreover, on the 4-hour chart, the pair tested the 100-hour MA and the 200-hour MA. If the pair is able to close below the 200-hour MA, the further fall is anticipated. Next supports are at 1.2860 and 1.28. However, if the US dollar becomes stronger on Thursday and the news for the Canadian dollar isn’t encouraging, the pair will return to 1.2975.
Despite the depreciation against other currencies, the US dollar is still strong against the Japanese yen. USD/JPY rebounded from the support at 109.70. Up to now, the pair is trading near the 200-day MA (110.20) and the 50-week MA, they are a strong resistance. If the pair isn’t able to break the resistance, the pair will continue to trade within 109.70 – 110.20. Otherwise, the pair will move further to 110.85.