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March 2nd - Fighting in the Middle East has sparked concerns about potential major disruptions to global energy supplies, causing European natural gas prices to surge. European benchmark natural gas futures prices rose by as much as 25%, marking the largest single-day increase since August 2023. This followed the near-total halt of traffic in the Strait of Hormuz. This narrow waterway is a crucial global energy transport route, carrying approximately 20% of global liquefied natural gas (LNG) exports. Oil prices also rose sharply. The current situation could trigger the most severe shock to the natural gas market since the Russia-Ukraine conflict. Although Asian countries purchase the majority of LNG shipped from the Middle East, any supply disruptions will intensify competition for alternative supplies, thereby pushing up global natural gas prices, including in Europe.Swiss National Bank: In light of the international situation, we are better prepared to intervene in the foreign exchange market to curb the rapid and excessive appreciation of the Swiss franc.Jun Mimura, Japans top foreign exchange official: My meeting with the Prime Minister showed that the political momentum for insisting on a temporary reduction in food sales tax as part of the election platform is quite strong.British Foreign Secretary Cooper: 102,000 Britons have responded to our proposal and registered their whereabouts in the Middle East.March 2 – Foreign Ministry Spokesperson Mao Ning held a regular press conference on March 2. Regarding the joint US-Israeli attack on Iran, did China contact the US beforehand or during the operation? "I can tell you that China was not notified in advance of the US military operation," Mao Ning said.

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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