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16 May 2024,02:02

Market InsightsTrade Of The Day

USD/CAD Declines As US Inflation Moderates.

16 May 2024, 02:02

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Fundamental Analysis

* Inflation Chill: The Canadian dollar has strengthened against the US dollar due to a cooler-than-expected US Consumer Price Index report, which has caused the greenback to weaken. This decrease in inflationary pressure has revived hopes in the market for potential rate cuts by the Federal Reserve in September. In April, US CPI inflation dropped to 0.3% from the expected hold at 0.4%, leading to increased risk appetite and a decline in the value of the US dollar. Additionally, core US CPI inflation for the year up to April matched the expected average of 3.6%, slightly lower than the previous period’s 3.8%. US Retail Sales in April were also disappointing, coming in at 0.0% compared to the forecasted decrease to 0.4% from the previous 0.6% (which was revised from 0.7%).

Technical Analysis

* Technical Breakout: USDCAD was traded lower following recent breakout below the previous support level 1.3615. MACD which illustrate ongoing bearish momentum signal with recent bearish market structure breakout suggest the pair to further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 1.3550. Conversely, a potential correction is also to be expected and the price could head back towards 1.3665 should the price breach above the level 1.3615.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, investors will remain focused on US data to assess market sentiment, especially with a lack of economic data from Canada for the week. Additionally, market participants will keep a close eye on crude oil prices, given that Canada is one of the largest exporters of crude oil.

Know how to manage trading risks with risk management strategies.


Stay updated on US and Canada data, Fed updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.

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