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On September 19th, Zhang Bin, a researcher and deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, stated at the Tsinghua PBC School of Finance Chief Economist Forum that the main imbalance in my countrys current economy is strong supply and weak demand, a kind of aggregate imbalance. "There are many reasons for insufficient demand, but the most crucial one lies in the weak expectations of business entities; enterprises and residents are hesitant to invest and spend money. Individual behaviors are rational and reasonable, but the cumulative effect of micro-level behaviors creates a negative self-amplifying mechanism, forming a negative cycle," Zhang Bin said. Zhang Bin believes that the key to breaking the demand shortage is first to break the negative cycle. A negative cycle itself is a market failure, requiring strong external forces to break it; the most effective tool is to increase counter-cyclical adjustments.Market news: Bolivia will set a unified diesel price, which will be linked to international oil prices.According to AFP: Police officials say the death toll in the attack on Pakistans police headquarters has risen to 31.On September 19th, the Beijing Municipal Administration for Market Regulation announced that, based on the work deployment of the State Administration for Market Regulation and preliminary investigations, it has initiated investigations into four online hotel and travel booking platform companies for suspected illegal activities. Fliggy issued a statement saying that it attaches great importance to this matter and will actively cooperate with the Beijing Municipal Administration for Market Regulations investigations to fully implement regulatory requirements. Fliggy has always respected and maintained a fair, open, and orderly market environment and will continue to work with all parties in the industry to promote high-quality development of the industry.September 19th - A mudslide occurred near the Shijiagou Tunnel in Zhiliuhe Village, Gesala Township, Yanbian County, Panzhihua City, Sichuan Province in the early hours of the 19th. According to relevant departments, preliminary statistics indicate that five people are currently missing.

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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