USD/CAD Price Analysis – April 09, 2024
Daily Price Outlook
The USD/CAD currency pair has shown a mild bullish performance and remained well-bid around the 1.3580 level amid renewed strength of the US dollar. However, this upward movement can be attributed to several factors, including reduced Fed rate cut bets, which have pushed US bond yields higher, reviving demand for the US dollar and contributing to the USD/CAD currency pair's gains.
It should be noted that the recent upbeat monthly US jobs report, along with hawkish remarks from several Federal Reserve officials, suggest that the Fed may delay cutting interest rates. This has boosted the yield on the benchmark 10-year US government bond, supporting the US dollar and contributing to its bullish performance against the CAD.
Impact of US Economic Data on USD/CAD
On the US front, the reduced bets on a Fed rate cut have pushed US bond yields higher, which has had a positive impact on the USD/CAD currency pair. However, the upbeat monthly US jobs report released recently, along with hawkish remarks from Fed officials, indicate that the Fed will likely delay cutting interest rates. This has led to an increase in the yield on the 10-year US government bond, further bolstering the USD and contributing to its strength against the CAD.
Impact of Middle East Tensions on Oil Prices and USD/CAD Pair
On the geopolitical front, recent tensions in the Middle East, including threats of military action by Iran against Israel, have led to concerns about potential supply disruptions in the oil market. This has supported oil prices, which in turn has underpinned the CAD, capping gains for the USD/CAD pair. It is worth noting that the situation in the Middle East remains tense due to stalled peace talks between Israel and Hamas, with threats of military action from Iran. This has heightened tensions, driving up oil prices as it led to concerns about potential supply disruptions in the oil market,
USD/CAD - Technical Analysis
The USD/CAD pair edged up slightly to 1.35805, marking a 0.06% increase on April 9. The currency is oscillating around a pivot point of 1.3568, indicating a potential for directional movement. Resistance levels are spotted at 1.3614, 1.3641, and 1.3675, which could cap upward trends. On the flip side, immediate support lies at 1.3539, followed by stronger levels at 1.3515 and 1.3483, serving as buffers against downward pressures.
With a Relative Strength Index (RSI) of 53, the market sentiment appears neutral, suggesting balanced buying and selling activities. The 50-day Exponential Moving Average (EMA) at 1.3560 closely aligns with the current price, reinforcing the significance of the pivot point and suggesting a stable trend.
For traders, a strategic entry point is advised above 1.35692, targeting a take-profit level at 1.36145, with a stop loss at 1.35480 to limit potential downside risk.
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