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March 11 - Shipping data released on Tuesday suggests that Saudi Arabias oil shipments via the Red Sea are on track to reach a record high in March, though still far below the decline in oil flow through the Strait of Hormuz. Data from the London Financial Exchange Group shows that Yanbu Ports average loading volume for the first nine days of March reached 2.2 million barrels per day, up from nearly 2 million barrels per day last week and 1.1 million barrels per day in February. Before the closure of the Strait of Hormuz, Saudi Arabia exported approximately 6 million barrels of oil per day through the strait. Kpler shipping data indicates that at least 40 tankers may load in March, potentially pushing exports above 4 million barrels per day. However, while traders claim the ports capacity exceeds 4.5 million barrels per day, actual loading volumes rarely exceed 2.5 million barrels per day.Saudi Arabia claims it shot down two drones that were flying toward the Shayba oil field.March 11 – National Australia Bank (NAB) stated that the Reserve Bank of Australia (RBA) may now raise interest rates in both March and May, with a peak rate of 4.35%. The banks economics and markets research team noted this is an adjustment from their previous forecast of a single rate hike in May with a peak rate of 4.1%. A key reason for this change in view is the hawkish comments from the RBA Governor and Deputy Governor over the past week. The team stated that the RBA appears to have "very limited tolerance for upward inflationary pressures, but perhaps slightly more tolerance for slower economic growth. This means the least regrettable policy move would be a rate hike in March."The market currently estimates a 70% probability that the Reserve Bank of Australia will raise interest rates to 4.10% on March 17.Economists from Westpac, ANZ, Citigroup, and Deutsche Bank have all revised their forecasts for the Reserve Bank of Australias interest rates, now expecting a rate hike next week.

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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