- The USD/CAD pair has decreased to less than 1.3600, which now provides resistance.
- Israel’s attack on Iran failed to support the broader recovery of the US dollar.
- Inflation expectations in the United States continue to decline, which leads to pressure on the US dollar.
The Canadian dollar (CAD) is trading against the US dollar (the US dollar) in the American session on Friday, with LONIE erasing from previous sessions.
At the time of writing this report, the US dollar/CAD is trading less than 1.3600, as prices are tested in eight months.
On Friday’s headlines are dominated by reports that Israel targeted Iranian nuclear facilities and residential complexes, killing many senior Iranian officials. This news briefly raised the US dollar/CAD off its lowest level, although the husband quickly slipped down, with the lower direction line continuing to spoil him.
Also on Friday, the University of Michigan issued its initial survey of consumers, showing a remarkable rise in confidence between American families.
Meanwhile, consumer inflation forecasts decreased for a year and five years less, echoing consumer prices more softening than expected (CPI) and Producers’ price index readings (PPI) earlier in the week.
The slowdown in inflation has increased from the Federal Reserve (Fed) to reduce interest rates, which reduces the American return and its weight on the dollar.
Technical Analysis: USD/CAD is less than 1.3600
The dollar/CAD is close to the support level of 1.3588, which corresponds to the base of the falling pattern of the chart for four hours. This level has now become resistance in the short term, which contributes to momentum.
The RSI is currently located near 32, indicating a declining bias and approaching the sale area, although there is still a possibility for more declines.
If the declining momentum continues, the price may reach the level of psychological support of 1.3500, which may lead to an additional decrease towards the lowest level in October 1.3472. On the other hand, if the price exceeds 1.3588 and exceeds the level of psychological resistance of 1.3600, it may provide an opportunity for the US dollar/CAD to re -test the simple moving medium 10 (SMA) at 1.3624.
Dollar Plan/CAD for four hours
Less than 1.3600 decreased, which is now served
Questions and answers in Canadian dollars
The main factors that lead the Canadian dollar (CAD) are the level of interest rates set by the Bank of Canada (BOC), the price of oil, the largest export in Canada, the health of its economy, inflation and commercial balance, which is the difference between the value of exports in Canada in exchange for its imports. Other factors include market morale-if investors are eating more risky assets (risk) or searching for safe materials (risk)-with positive CAD risks. As its largest commercial partner, the health of the American economy is also a major factor that affects the Canadian dollar.
Canada Bank (BOC) has a major impact on the Canadian dollar by determining the level of interest rates that banks can persuade each other. This affects the level of interest rates for everyone. The main goal of BOC is to keep inflation by 1-3 % by setting interest rates up or down. Relatively higher interest rates tend to be positive for CAD. Canada Bank can also use quantitative dilution and tighten it to influence credit conditions, with previous CAD negative and the other positive CAD.
The price of oil is a major factor that affects the value of the Canadian dollar. Petroleum is the largest export in Canada, so the price of oil tends to an immediate effect on the CAD value. In general, if the price of oil rises, the CAD rises, with the increased total demand for the currency. The opposite is the case if the price of oil decreases. The high oil prices also tend to increase the possibility of a positive commercial balance, which also supports CAD.
While inflation was always believed to be a negative factor of the currency because it reduces the value of money, the opposite was already the case in the modern era with the relaxation of capitalist controls across the border. Top inflation tends to lead the central banks to raise interest rates that attract more capital flows from global investors looking for a profitable place to keep their money. This increases the demand for the local currency, which in the case of Canada is the Canadian dollar.
Victory of macroeconomic data evaluates the health of the economy and can have an impact on the Canadian dollar. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect CAD direction. The strong economy is useful for the Canadian dollar. Not only attracts more foreign investments, but it may encourage Canada Bank to set interest rates, which leads to a stronger currency. If economic data is weak, CAD is likely to fall.
