USD/CAD set to close a third consecutive weekly decline – Crypto News – Crypto News
Connect with us
Further upside hinges on 1.2980 breakout Further upside hinges on 1.2980 breakout

others

USD/CAD set to close a third consecutive weekly decline – Crypto News

Published

2 years ago

on

Share:

  • The USD/CAD dipped to a multi-month low of 1.3188, last seen in September 2022.
  • Rising Oil prices give traction to CAD.
  • Hawkish Fed speakers limit the pair’s upside potential.

On Friday, the USD/CAD continued its downward momentum dropping to a low of 1.3188 and its set to confirm a 100 pips weekly decline. Expectations that the rate peak of the Federal Reserve (Fed) will weaken the US Dollar linger but an upbeat Consumer Confidence Index from the University of Michigan and hawkish Fed speakers limit the downside potential.

UoM Confidence Data Surpassed Expectations, Hawkish Speaker Revives US Yields

The University of Michigan (UoM) reported that the Michigan Consumer Sentiment Index for June surpassed expectations at 63.9, indicating increased consumer confidence compared to the previous figure of 59.2. Additionally, the five-year Consumer Inflation Expectation dropped to 3% from the anticipated 3.1%. These positive data points helped strengthen the US Dollar,

Furthermore, after the Federal Open Market Committee (FOMC) released its monetary policies statement and updated dot plots on Wednesday – indicating a projected additional tightening of 50 basis points – various speakers from the Federal Reserve reiterated on Friday their concern with inflation, showing their willingness to continue hiking.

Christopher Waller of the Federal Reserve expressed concerns about the lack of progress in core inflation and suggested the possibility of further tightening if necessary, while Thomas Barkin argued that he is comfortable “doing more” if the data warrants it. As a response, the US bond yields are seeing gains across the curve. The 10-year bond yield rose to 3.78%, while the 2-year yield stands at 4.74% and the 5-year yield at 4.00%, respectively, with all three seeing more than 1% increases on the day.

USD/CAD Levels to watch

According to the daily chart, the USD/CAD holds a bearish position. Outlook for the short term as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both suggest that the sellers are in control while the pair trades well below its main moving averages. However, the RSI pierced through the oversold threshold, indicating that a healthy upward correction may be needed in the upcoming sessions.

The 1.31500 level remains the key support level for USD/CAD. If broken, the 1.3100 zone and 1.3090 area could come into play in case of further downside. Furthermore, a move above the 1.3250 zone would favor the pair’s bullish momentum, with next resistances at the 1.3270 area and 1.3330 psychological mark.

USD/CAD Levels to watch

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending