In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDCAD for 5th June 2024.
Key Takeaways
- Weak US economic data: Yesterday, US job vacancies in April fell to the lowest level since 2021. Following its release, the Federal Reserve’s interest rate swaps showed a slight increase in the number of interest rate cuts for 2024 while the 10-year Treasury yield fell to the lowest level since May 16.
- Today’s US data: Today, the United States will release the ADP Employment Change and the US ISM non-manufacturing PMI. A lower-than-expected reading may accelerate the downfall of US dollar due to relatively high chance for more rate cuts ahead.
- Bank of Canada: The Bank of Canada will announce its interest rate decision later with the market expecting a 25-basis point interest rate cut. The announcement of rate cut coupled with low oil prices may prompt further selloff of Canadian dollar.
Technical Analysis
Daily Chart Insights
- Stochastic Oscillator: The indicator fluctuates near the midline, suggesting the pair to oscillate in the near-term with no significant signal on its trend direction. Nonetheless, a new trend may be formed following a breakout at either side of the narrowing triangle thereafter.
- Convergence range: Since April 17, USDCAD has undergone a gradual descend while forming a downward trendline. The pair will be required to break either side of the resistance or support level to determine its trend direction for the short-term.
H4 Chart Insights
- Stochastic Oscillator: The indicator formed a bullish signal at the oversold region along with the divergence signal which has been completed with recent rise. Looking ahead, the pair is skewed towards the downside in short-term due to its recent cap in rising.
- Moving average support: Both moving averages which entangles near the recent candlestick suggests possible sideways trend ahead. It is strongly suggested to look for possible retracement signal in the meantime. Nonetheless, if the pair fails to fall below the moving average line, it is expected to skew its biasness towards the upside thereafter.
Pivot Indicator
- According to the trading central in Ultima Markets APP, the central price of the day is established at 1.3655,
- Bullish Scenario: Bullish sentiment prevails above 1.3655, first target 1.3695, second target 1.3710;
- Bearish Outlook: In a bearish scenario below 1.3655, first target 1.3640, second target 1.3620.
Conclusion
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Disclaimer
Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.
