Even with the big dollar moves recently, USD/CAD is still stuck in a range!
Will it bounce from those inflection points again?
Before we go any further, ICYMI, yesterday’s watchlist looked at EUR/USD breaking out of its channel ahead of the ECB’s decision. Be sure to check if it’s still a good game!
And now for the main headlines that rocked the markets in the last trading sessions:
Headlines and recent economic data for the market:
The Federal Open Market Committee raised interest rates by 0.25%. As expected from 5.00% to 5.25%, as policy makers note that inflation remains above target
Fed Chairman Powell They noted that there is strong support for raising interest rates and that the pause was not discussed during their meeting
Powell also mentioned that policymakers believe they are nearing the end of their tightening cycle, but that a cut would not be appropriate given inflation trends.
US ISM Services PMI It improved from 51.2 to 51.9 vs. 51.8 expected in April, as new orders and prices paid indicators increased while the employment component decreased
US Regional Bank PacWest It was reported to be considering “strategic options” such as selling its assets
ANZ New Zealand commodity prices fell 1.7% month-on-month in April versus a previous gain of 1.3%, as exporters’ freight rates continued to slide
Australian trade surplus It expanded from A$14.1 billion to A$15.27 billion in March from A$13 billion, thanks to a 4% increase in exports.
China Caixin Manufacturing PMI Down from 50.0 to 49.5 in April rather than flat, input costs and selling prices fell at their fastest pace in seven years
Price action news
15-minute USD pairs overlay Graphics by TV
The FOMC statement kept the US dollar in a sell mode, even as the central bank raised interest rates and avoided hinting at a pause anytime soon.
The US dollar fell lower overall, accelerating its decline against the Japanese yen as risk aversion flows remained.
Meanwhile, the low-yielding yen managed to consolidate against the rest of its rivals, as markets grew concerned about a possible recession in the US and the potential collapse of another regional bank.
Dollar selling extended into early Asian hours before a bit of profit taking allowed the greenback to ease off its lows.
Possible catalysts coming in the economic calendar:
ECB Monetary Policy Statement at 12:15pm GMT
ECB press conference at 12:45pm GMT
Canadian Ivy PMI at 2:00pm GMT
Bank of Canada Governor McClim Speech at 4:50pm GMT
Use our new file Currency heat map To quickly see a visual overview of the forex market price movement! 🔥 🗺️
USD/CAD 15-minute forex Planned by TV
This forex pair is still moving quietly within its good range, probably because dollar and looney traders are waiting for tomorrow’s US and Canadian jobs reports.
USD/CAD is approaching a resistance band just below R1 (1.3640) of the standard pivot points.
If this continues, the price could drop back to a low of 1.3580, which happens to line up with S1.
However, if the dollar suffers another bearish wave across the board, we may see a range breakdown that takes USD/CAD to the next floor near S3 (1.3530).
Be sure to keep close tabs on the headlines, especially on any updates with more bank defaults, because that could mean more downside for the dollar.