- The USD/CAD goes back around 1,3720 in the first measures of the European session on Tuesday.
- The torque maintains the negative perspective below the 100 -day EMA with a bearish RSI indicator.
- The initial support arises in 1,3635; The first upward barrier is located in 1,3820.
He USD/CAD It quotes in negative territory around 1,3720 during the early European session on Tuesday. The dollar weakens against the Canadian dollar (CAD) as a high fire between Iran and Israel enters into force after four waves of Iranian attacks in territories occupied by Israel.
In addition, the dovish comments of those responsible for the monetary policy of the Federal Reserve of the USA (FED) also undermine the US dollar (USD). The governor of the Fed, Michelle Bowman, said Monday that he would favor a reduction of interest rates in the next monetary policy meeting in July, provided that inflationary pressures are held contained.
According to the daily graph, the bassist perspective of the USD/CAD remains in force since the torque remains limited below the average exponential (EMA) mobile key of 100 days. The lower resistance road is down, with the 14 -day relative force (RSI) index below the midline about 47.75.
The first downward objective for the PAR arises in 1,3635, the minimum of June 18. Extended losses could see a fall to 1,3575, the lower limit of the Bollinger band. The next containment level for the USD/CAD is observed in 1,3540, the minimum of June 16.
On the positive side, the immediate resistance level is located in 1,3820, the upper limit of the Bollinger band. A sustained trade above this level could attract some buyers to 1,3862, the maximum of May 29. Further north, the next obstacle to observe is 1,3935, the 100 -day EMA.
USD/CAD DIARY GRAPH
Canadian dollar faqs
The key factors that determine the contribution of the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BOC), the price of oil, the main export product of Canada, the health of its economy, inflation and commercial balance, which is the difference between the value of Canadian exports and that of its imports. Other factors are market confidence, that is, if investors bet on riskier assets (Risk-on) or seek safe assets (Risk-Off), being the positive risk-on CAD. As its largest commercial partner, the health of the US economy is also a key factor that influences the Canadian dollar.
The Canada Bank (BOC) exerts a significant influence on the Canadian dollar by setting the level of interest rates that banks can provide with each other. This influences the level of interest rates for everyone. The main objective of the BOC is to maintain inflation between 1% and 3% by adjusting interest rates to the loss. Relatively high interest rates are usually positive for CAD. The Bank of Canada can also use quantitative relaxation and hardening to influence credit conditions, being the first refusal for CAD and the second positive for CAD.
The price of oil is a key factor that influences the value of the Canadian dollar. Oil is the largest export in Canada, so the price of oil tends to have an immediate impact on the value of the CAD. Generally, if the price of oil rises, the CAD also rises, since the aggregate demand of the currency increases. The opposite occurs if the price of oil drops. The highest prices of oil also tend to give rise to a greater probability of a positive commercial balance, which also supports the CAD.
Although traditionally it has always been considered that inflation is a negative factor for a currency, since it reduces the value of money, the opposite has actually happened in modern times, with the relaxation of cross -border capital controls. Higher inflation usually leads to central banks to raise interest rates, which attracts more capital of world investors who are looking for a lucrative place to save their money. This increases the demand for the local currency, which in the case of Canada is the Canadian dollar.
The published macroeconomic data measure the health of the economy and can have an impact on the Canadian dollar. Indicators such as GDP, manufacturing and services PMIs, employment and consumer confidence surveys can influence the CAD direction. A strong economy is good for the Canadian dollar. Not only attracts more foreign investment, but it can encourage the Bank of Canada to raise interest rates, which translates into a stronger currency. However, if the economic data is weak, the CAD is likely to fall.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
