- The USD/CAD weekly forecast suggests an rising probability of a BoC pause in June.
- Merchants are pricing a 27% likelihood of a BoC fee lower on the June assembly.
- Market individuals are nervous in regards to the debt scenario within the US.
The USD/CAD weekly forecast suggests an rising probability of one other Financial institution of Canada pause in June.
Ups and downs of USD/CAD
The USD/CAD pair had a bearish week because the Canadian greenback strengthened and the US greenback fell. The loonie had a powerful week after Canada reported hotter-than-expected inflation numbers. The figures led to a pointy drop in Financial institution of Canada fee lower expectations. At the moment, merchants are pricing a 27% likelihood of a fee lower on the June assembly.
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In the meantime, the greenback fell as market individuals nervous in regards to the debt scenario within the US. Moody’s downgraded the nation’s credit standing as a result of its enormous debt. In the meantime, Trump’s insurance policies would possibly add to the already giant debt.
Subsequent week’s key occasions for USD/CAD
Subsequent week, the US will launch key experiences displaying the state of the financial system. These embrace sturdy items orders and the gross home product. Furthermore, market individuals will undergo the FOMC assembly minutes for clues on future strikes.
The earlier GDP studying revealed a 0.3% contraction within the financial system. A weaker-than-expected studying subsequent week would level to weak spot that would strain the Fed to decrease borrowing prices.
Furthermore, merchants will watch Canada’s GDP report, which may even form the outlook for BoC fee cuts. After this week’s upbeat inflation figures, fee lower expectations have considerably dropped, with a better probability of one other pause in June.
USD/CAD weekly technical forecast: Bears eye the 1.3400 assist
On the technical aspect, the USD/CAD worth has damaged and closed under the 1.3800 assist degree, confirming a continuation of the downtrend. On the similar time, the worth now trades under the 22-SMA with the RSI nearing the oversold area, suggesting a powerful bearish bias.
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Beforehand, the worth was buying and selling in a brand new downtrend earlier than it paused on the 1.3800 key assist degree. Right here, bearish momentum weekend and worth motion confirmed that. In consequence, bulls emerged to push the worth above the 22-SMA.
Nevertheless, the rebound was temporary as the worth paused on the 1.4000 key psychological degree. This allowed bears to return and make a decrease low. Given the strong bearish bias, the worth would possibly drop to the 1.3400 assist degree subsequent week.
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