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March 10 – OCBC strategists stated that the pullback in energy prices from their highs has given Asian currencies a breather, but shifting geopolitical tensions keep risks two-way. Oil prices retreated after Trump indicated the Middle East conflict could end “soon” and the Strait of Hormuz would remain safe. He said, “Meanwhile, during this brief disruption, the US is providing political risk insurance to any oil tankers operating in the Gulf region.” A weaker dollar has revived carry trades in emerging markets, but markets remain tense. OCBC strategists Sim Moh Siong and Christopher Wong stated that the longer the Strait of Hormuz remains closed, the more oil production will be shut down. OCBC remains neutral on the dollar until clearer signs of de-escalation emerge.The Peoples Bank of China (PBOC) announced today that it conducted 39.5 billion yuan of 7-day reverse repurchase operations, with both the bid and winning bids amounting to 39.5 billion yuan. The operating rate was 1.40%, unchanged from the previous rate.The main Shanghai silver futures contract surged 6.00% intraday, currently trading at 22,525.00 yuan/kg.Japanese Finance Minister Satsuki Katayama: Prime Minister Kaoshima and I hope that the Bank of Japan will continue to work closely with the government to steadily achieve the 2% inflation target, which is driven not by cost-push factors, but by wage growth.Japanese Finance Minister Satsuki Katayama: The specific monetary policy measures will be determined by the Bank of Japan.

USD/CAD Bears Anticipate Additional Losses Towards $1.34

Alina Haynes

Apr 13, 2023 14:22

 USD:CAD.png

 

Following a three-day losing trend, the USD/CAD continues to trade near the weekly low around 1.3440 in the early hours of Thursday.

 

In doing so, the Loonie pair justifies yesterday's pullback from the 61.8% Fibonacci retracement of the February-March uptrend, as well as yesterday's retreat from the 100-bar Exponential Moving Average (EMA), in conjunction with negative MACD signals.

 

Notably, the RSI (14) line is approaching the oversold region, indicating the USD/CAD exchange rate has limited downside potential.

 

Consequently, a horizontal area containing multiple lows marked since March 3 around 1.3400 becomes the most crucial support for pair traders to track. In addition, the 78.6% Fibonacci retracement level encircling 1.3390 provides immediate support.

 

A irregular decline towards February's low of 1.3262 cannot be ruled out if the USD/CAD defies RSI conditions and descends below 1.3390.

 

In contrast, the 61.8% Fibonacci retracement level around 1.3490, also known as the golden Fibonacci ratio, restricts immediate USD/CAD recovery movements prior to the 1.3535 100-exponential moving average (EMA) barrier.

 

If the USD/CAD exchange rate remains firmer than 1.3535, a convergence of the 200-exponential moving average (EMA) and 50% Fibonacci retracement around 1.3565 will pose a formidable obstacle for buyers.

 

At the time of publication, USD/CAD investors should remain cautious unless they observe a clear break above the previous support line from early February, which was near 1.3670.


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