USD/CAD is stuck inside a descending triangle and looks ready to test support.
Will it hold up during the U.S. CPI release?
Before moving on, ICYMI, yesterday’s watchlist looked at a simple bearish pullback on EUR/USD. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand visitor arrivals slumped 16.9% month-over-month in April while the number of long-term and permanent migrants fell to its lowest level since October last year
Japanese BSI manufacturing index improved from -10.5 to -0.4 in April-June 2023 quarter versus estimated -4.2 reading, reflecting weaker pessimism
Australia’s Westpac consumer sentiment index posted a 0.2% uptick in June, following earlier 7.9% drop
Australian NAB business confidence index fell from 0 to -4 in May to reflect worsening conditions
People’s Bank of China cut 7-day reverse repo rate from 2.0% to 1.9% and lowered onshore reference rate by 200 points
U.K. claimant count fell by 13.6K instead of posting the estimated 21.4K rise in joblessness in May, earlier reading revised to show a smaller 23.4K increase in unemployment from initially printed 46.7K
U.K. average earnings index accelerated from 6.1% to 6.5% in the three-month period ending in April, reflecting stronger inflationary pressures
Price Action News
Overlay of USD Pairs 15-min
Major forex pairs had a mixed run in the past few hours, as dollar traders are likely holding out for today’s U.S. CPI release.
The Greenback is trading notably lower against the Aussie, Kiwi, and euro since hopes for a Fed pause are in play due to weaker inflation estimates.
On the flip side, it managed to squeeze out a few gains against the Japanese yen likely due to forecasts of another dovish BOJ statement later this week.
Upcoming Potential Catalysts on the Forex Economic Calendar:
German and eurozone ZEW economic sentiment indices at 9:00 am GMT
U.S. May headline and core CPI at 12:30 pm GMT
BOE Governor Bailey’s speech at 2:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
USD/CAD: 15-min
USD/CAD 15-min Forex Chart by TV
Check out this descending triangle on USD/CAD!
The pair just retreated from the top and is inching back below today’s pivot point (1.3360), possibly aiming for support again.Now the bottom of the triangle lines up with S1 (1.3330), so buyers might be hanging around at this area. If the floor holds, USD/CAD could bounce to the triangle resistance around 1.3370 or even break higher and test R1 (1.3400).
A breakdown, on the other hand, could set off a move to S2 (1.3290) near the 1.3300 handle.
Dollar traders are likely to wait for the May U.S. CPI report to be printed before taking any large bets. Note that analysts are projecting another dip in price pressures, which could dash hopes for a Fed rate hike later this week.