Market news
06.05.2024, 13:48

USD/CAD edges down to 1.3650 as US Dollar drops, Oil price rebounds

  • USD/CAD drops to 1.3650 on multiple headwinds.
  • Firm speculation for Fed rate cuts in September has uplifted the market mood.
  • A sharp recovery in the Oil price improves the Canadian Dollar’s appeal.

The USD/CAD pair falls after failing to recapture the crucial resistance of 1.3700 in Monday’s early New York session. The Loonie asset slips to 1.3650 due to multiple headwinds: a decline in the US Dollar and a sharp recovery in the Oil price.

Market sentiment is quite bullish, as investors’ confidence in the Federal Reserve (Fed) reducing interest rates from the September meeting has improved. The S&P 500 opens on a bullish note, exhibiting a higher risk appetite. The scenario of the Fed pivoting to interest rate cuts is unfavorable for bond yields. 10-year US Treasury yields have come down below the crucial support of 4.50%.

The US Dollar Index (DXY) struggles for a firm footing above 105.00 as weak United States economic data has raised concerns over the economic outlook. The US Nonfarm Payrolls (NFP) and the Services PMI data for April showed that labor demand was weak, the Unemployment Rate rose to 3.9%, wage growth slowed, and Services PMI fell to an almost 16-month low of 49.4. These conditions indicate that the economy is failing to cope with the Fed’s restrictive framework.

Meanwhile, the Canadian Dollar gains as the Oil price rebounds from $77.75. West Texas Intermediate (WTI), futures on NYMEX, ends its six-day losing spell as investors worry about geopolitical risks. Israel is expected to extend operations in Rafah, the southern part of Gaza, as prospects for a Gaza ceasefire appear slim. On Sunday, Hamas reiterated its demand for an end to the war in exchange for the freeing of hostages but Israeli Prime Minister Benjamin Netanyahu flatly ruled that out, Reuters reported.

It is worth noting that Canada is the leading exporter of Oil to the US and higher Oil prices strengthen the Canadian Dollar.

USD/CAD

Overview
Today last price 1.3654
Today Daily Change -0.0032
Today Daily Change % -0.23
Today daily open 1.3686
 
Trends
Daily SMA20 1.3707
Daily SMA50 1.3608
Daily SMA100 1.3511
Daily SMA200 1.3554
 
Levels
Previous Daily High 1.3692
Previous Daily Low 1.361
Previous Weekly High 1.3785
Previous Weekly Low 1.361
Previous Monthly High 1.3846
Previous Monthly Low 1.3478
Daily Fibonacci 38.2% 1.3661
Daily Fibonacci 61.8% 1.3641
Daily Pivot Point S1 1.3633
Daily Pivot Point S2 1.358
Daily Pivot Point S3 1.3551
Daily Pivot Point R1 1.3715
Daily Pivot Point R2 1.3745
Daily Pivot Point R3 1.3797

 

 

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