• June 21, 2024
  • Currencies

CAD: Possible CAD Weakness Brews

The USDCAD pair rebounded sharply from an 11-day low near 1.3670 during Friday’s American session as the US Dollar gained strength following unexpectedly strong US S&P Global PMI data for June. The US Dollar Index (DXY) surged to a six-week high around 105.90. Despite this, uncertainty remains about the US Dollar's future, as market participants anticipate the Federal Reserve will start reducing interest rates from September, potentially cutting rates twice this year, contrary to Fed officials who suggest only one cut. The Canadian Dollar saw little movement as Canada’s Retail Sales for April met expectations with a 0.7% month-on-month increase, following three months of contraction. This positive Retail Sales data did little to impact the "Loonie" amidst the broader market dynamics.

EURCAD – H4 Timeframe

EURCADH4 (2).png

EURCAD on the 4-hour timeframe is currently trading within the vicinity of a drop-base-rally demand zone that falls within the 88% of the Fibonacci retracement tool. Also, the previous break of structure being bullish lends credible confluence in favour of the bullish sentiment.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.48094

Invalidation: 1.45812

GBPCAD – W1 Timeframe

GBPCADH4 (3).png

Here on the 4-hour timeframe chart of GBPCAD, we see price currently slipping towards the confluence of the demand zone and the trendline support. It is my expectation that the downward move would persist, at least until the drop-base-rally demand zone is reached, before the likelihood of a bullish move presents itself. It is also noteworthy that the demand zone falls within the critical zone of the Fibonacci retracement tool.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.74191

Invalidation: 1.71916

NZDCAD – H4 Timeframe

NZDCADH4 (2).png

In the case of NZDCAD, price is still a long way off from the demand zone. Judging from the Weekly timeframe analysis as highlighted here. My initial target is the highlighted demand zone, and I anticipate the bearish move will persist until there is a considerable reaction from the bulls around the demand zone region.

Analyst’s Expectations: 

Direction: Bearish

Target: 0.82416

Invalidation: 0.84373

CONCLUSION

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Author: Adetola-Freeman Ogunkunle