USD/CAD Price Analysis: Extends Its Upside On Unexpectedly Robust Preliminary US PMI Growth -

USD/CAD Price Analysis: Extends Its Upside On Unexpectedly Robust Preliminary US PMI Growth

Jun 21, 2024Jeremy ParkinsonFinance0

USD/CAD bounces back strongly after upbeat US preliminary S&P Global PMI report for June.

Canadian Retail Sales grew expectedly by 0.7%.

The Fed is expected to deliver two rate cuts this year.

The USD/CAD pair recovers strongly from 11-day low near 1.3670 in Friday’s American session. The Loonie asset bounces back as the US Dollar (USD) extends its upside after the US S&P Global PMI data for June shows that the Composite PMI surprisingly outperformed expectations that were pointing to slowdown in activity.The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to six-week high near 105.90.However, investors are still uncertain about the US Dollar’s outlook as investors expect that the Federal Reserve (Fed) will start reducing interest rates from the September meeting. Market participants expect that the Fed will cut interest rates twice this year. On the contrary, Fed policymakers continue to argue in favor of reducing interest rates only once this year.Meanwhile, the Canadian Dollar barely moved as Canada’s Retail Sales for April grew in line with expectations of 0.7% month-on-month. The Retail Sales data comes out positive after contracting for straight three months.USD/CAD trades in a Symmetrical Triangle chart pattern, which indicates a sharp volatility contraction. Spot prices remain sticky to the 20-day Exponential Moving Average (EMA) near 1.3700, indicating a sideways trend.The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting indecisiveness among market participants.Fresh buying opportunity would emerge if the asset breaks above the April 17 high at 1.3838. This would drive the asset towards the 1 November 2023 high at 1.3900, followed by the psychological resistance of 1.4000.In an alternate scenario, a breakdown below the June 7 low at 1.3663 will expose the asset to a May 3 low around 1.3600 and an April 9 low around 1.3547.

USD/CAD daily chart

USD/CAD

OVERVIEW Today last price 1.3692 Today Daily Change 0.0003 Today Daily Change % 0.02 Today daily open 1.3689

TRENDS Daily SMA20 1.3698 Daily SMA50 1.3698 Daily SMA100 1.3615 Daily SMA200 1.3584

LEVELS Previous Daily High 1.3721 Previous Daily Low 1.3682 Previous Weekly High 1.3792 Previous Weekly Low 1.368 Previous Monthly High 1.3783 Previous Monthly Low 1.359 Daily Fibonacci 38.2% 1.3697 Daily Fibonacci 61.8% 1.3706 Daily Pivot Point S1 1.3674 Daily Pivot Point S2 1.3659 Daily Pivot Point S3 1.3635 Daily Pivot Point R1 1.3713 Daily Pivot Point R2 1.3736 Daily Pivot Point R3 1.3751

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