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On May 15th, Reuters reported that Milan formally submitted his resignation to the Federal Reserve on Thursday, setting his departure date to be either or shortly before Warshs swearing-in as Fed chairman. Warsh is expected to be sworn in as Fed chairman in the coming days. In his resignation letter, Milan continued to warn that interest rates may be too high. He wrote that broader economic trends such as slowing population growth and deregulation will, on their own, reduce inflation, giving the Fed an opportunity to ease policy. He also argued that the technical challenges of measuring inflation could lead to inflation statistics being higher than they actually are.Israeli Prime Minister Netanyahu: If we had not waged two wars against Iran, we would be facing an entity with nuclear weapons, which would pose an existential threat to us.GFZ (German Center for Geosciences): A 6.37-magnitude earthquake struck the Banda Sea region.Iranian Foreign Ministry: Foreign Minister Araghchi met with Russian Foreign Minister Lavrov, and the two sides discussed and reviewed cooperation between Tehran and Moscow in the fields of politics, energy, transportation, and regional cooperation. They also exchanged views on the latest developments in West Asia and negotiations related to the Iranian nuclear issue.On May 15th, local time, an emergency meeting of interior ministers from the Gulf Cooperation Council (GCC) member states was held in Riyadh, the capital of Saudi Arabia, on May 14th. The meeting was chaired by Bahrain. The UAE delegation was led by Deputy Prime Minister and Minister of Interior Saif al-Islam. Saif stated that the UAEs participation in this meeting demonstrates the UAEs consistent adherence to the principle of "indivisible security within the GCC," meaning that any threat to GCC member states will directly affect the security and stability of the entire region. Saif stated that the UAE will continue to be committed to strengthening national security, safeguarding development achievements, consolidating social cohesion, and responding to all attempts to undermine the security and stability of GCC member states.

As investors wait for US/Canada employment data, the USD/CAD trading range is limited to 40 pips

Daniel Rogers

Apr 06, 2023 13:36

 USD:CAD.png

 

The USD/CAD pair retraced below 1.3450 in the early Asian session as the US Dollar Index (DXY) lost upside momentum after reaching the key resistance level of 102.00. As investors anticipate the release of the United States/Canada Employment data, the Canadian dollar is expected to deliver a dazzling performance.

 

As a consequence of a decline in Job Openings and sluggish additions of new positions, as measured by Automatic Data Processing, firms have slackened recruitment efforts, thereby alleviating the tight US labor market. (ADP). This has led to expectations that the Federal Reserve (Fed) will keep interest rates unchanged at its May meeting.

 

In the interim, S&P500 futures have resumed their downward trend, indicating a cautious market sentiment.

 

Employment data will influence the Canadian Dollar. The consensus estimate for Net Change in Employment is 12K, which is a decrease from the previous release of 21.8K. The estimated unemployment rate is 5.1%, up from 5.0% previously.

 

The USD/CAD exchange rate is exhibiting an Inverted Flag pattern on an hourly time frame. The Inverted Flag is a trend-following pattern that consists of a protracted consolidation followed by a decline. Participants prefer to enter an auction after a bearish bias has been established, and current vendors increase their position size during the consolidation phase of a chart pattern.

 

The Canadian dollar was unable to maintain a position above the 50-period Exponential Moving Average (EMA) at 1.3458, indicating that further declines are imminent.

 

Meanwhile, the Relative Strength Index (RSI) (14) has an upper limit of 60.00. A violation of the unfavorable 20.00-40.00 range will trigger downward momentum.

 

A break below the low of April 04, 1.3406, would expose the asset to a fresh six-week low around 1.3350, the low of February 6 followed by round-number support at 1.3300.

 

In an alternative scenario, a move above the psychological resistance of 1.3500 would lend momentum to US Dollar supporters, propelling the asset toward the 31- and 29-March highs of 1.3559 and 1.3619, respectively.


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