Contract Renewal Demand! USDCAD Upward Trend Remains Intact

Summary:

Tensions in the Middle East have escalated once again, pushing up oil prices for the third consecutive day, which has bolstered the commodity-linked Canadian dollar and limited gains in the USD/CAD exchange rate.

BUY USDCAD

Close Time

CLOSED

1.38571

Entry Price

1.42000

1.36000

1.41109 +0.00201 +0.14%

45.3

Pips

Profit

1.36000

1.39024

Exit Price

1.38571

Entry Price

1.42000

Fundamentals

The Office of the U.S. Trade Representative previously stated that the United States and Mexico have begun discussions on key issues such as automotive rules of origin, steel and aluminum trade, and economic security. Under the terms of the agreement, the three countries must complete their review of the pact by July 1; if they fail to reach an agreement on extending the deal by that date, the agreement will enter an annual review phase that will continue through 2036. Greer previously indicated that if Canada wishes to participate in the U.S.-led review process, it may need to accept some form of tariff arrangement.

The market is currently focused on the upcoming May nonfarm payrolls report. Economists generally expect the U.S. to add approximately 85,000 nonfarm jobs in May, down from 115,000 in April, but the unemployment rate is expected to remain unchanged at 4.3%. The continued robust performance of the labor market has also reinforced market expectations that the Federal Reserve will keep interest rates unchanged for an extended period.

Technical Analysis

On the 4-hour chart for USD/CAD, the Bollinger Bands are beginning to narrow, moving averages have flattened, and the MACD fast and slow lines have formed an “angel's kiss.” Overall, the bullish trend remains intact. The RSI stands at 64, indicating that market participants are predominantly buying. On the daily chart, the Bollinger Bands are widening upward, moving averages are diverging upward, and following a MACD golden cross, the fast and slow lines have returned above the 0 line. The price is highly likely to rise to 1.39. With the RSI at 65, market sentiment is predominantly optimistic. Strategically, look to buy on dips.

Contract Renewal Demand! USDCAD Upward Trend Remains Intact_1

Contract Renewal Demand! USDCAD Upward Trend Remains Intact_2

Trading Recommendation

Trading Direction: Buy

Entry Price: 1.385

Target Price: 1.42

Stop-Loss Price: 1.36

Support Levels: 1.35, 1.325, 1.28

Resistance Levels: 1.4, 1.41, 1.42

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Contract Renewal Demand! USDCAD Upward Trend Remains Intact

Risk Disclosure