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Market news: The Trump administration has canceled emissions credits from the Environmental Protection Agency for vehicles equipped with start-stop technology, ending a program designed to incentivize automakers to install fuel-saving systems that shut off the engine when stopped at red lights.February 16th - Analysts predict Asian stocks will rise on Monday after recent selling pressure in US stocks eased and inflation data supported expectations of a Federal Reserve rate cut this year. Japanese and Australian stock index futures also foreshadow gains. In early Sydney trading, the US dollar was largely unchanged against major currencies. The calm in the market suggests overall risk sentiment is supported after several weeks of declines in the S&P 500, driven by concerns about the impact of artificial intelligence on industries ranging from software to logistics.On February 16th, according to the Financial Times, British Prime Minister Keir Starmer warned Elon Musk and other tech executives that in the UK, "no platform has a passport" when it comes to illegal content. This comes as the Prime Minister is tightening online safety regulations following a scandal involving xAIs Grok chatbot. The government stated it will seek the power to "act swiftly" to close legal loopholes, explicitly bringing AI chatbots such as Grok, Googles Gemini, and OpenAIs ChatGPT under the jurisdiction of the Cybersecurity Act, alongside social media platforms like Instagram and TikTok. Starmer cited Musks AI company xAI and its Grok chatbot (which was used this year to generate pornographic images of women and children, triggering an investigation by the UK communications regulator Ofcom) as an example, saying, "Our actions with Grok send a clear message: no platform has a passport."Conflict Status: 1. A Ukrainian drone strike in Luhansk injured 19 people. 2. Russian forces claim they have taken control of 12 settlements previously held by Ukrainian forces this month. 3. Ukrainian military: Attacked the Taman oil terminal in Russias Krasnodar region. 4. Russian forces stated they have occupied the village of Tsvetkove in Ukraines Zaporizhzhia region. 5. The local governor stated that the port of Taman in Russias Krasnodar region was attacked by drones. Oil storage tanks, warehouses, and the dock at Taman port were damaged in the attack. Peace Negotiations: 1. Russian Deputy Foreign Minister: Russia is willing to discuss with the US and other parties the introduction of an external governance mechanism to Ukraine. 2. EU High Representative for Foreign Affairs and Security Policy, Kalas: It seems EU countries are not yet ready to give Ukraine a specific date for joining the EU. February 16th - On February 15th local time, Hungarian Foreign Minister Szijjártó posted on his personal social media that, due to Ukraines continued suspension of transit transport through the "Friendship" oil pipeline, Hungary and Slovakia have sought assistance from Croatia, hoping to transport Russian crude oil via the "Adriatic" pipeline. Szijjártó stated that Hungary and Slovakia had previously secured the right to continue purchasing cheap Russian crude oil through the "Friendship" pipeline, and this sanction exemption also includes the option of purchasing Russian crude oil by sea if transit via the pipeline becomes unfeasible.

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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