USD/CAD Cautious but Monetary Policy Remains a Tailwind
USD/CAD Analysis
The last US CPI print showed that the disinflation process is ongoing and yesterday's lackluster retail sales data reinforced market pricing for two rate cuts this year, to begin in September. This optimism weighs on the greenback and USD/CAD is having another cautious week, threatening the EMA200. Moves below it would could lead to a retest of the 38.2% Fibonacci of the December-April advance, but challenging 1.3419 has a higher degree of difficulty.
However, the pair has already defended tis pivotal level and above the EMA200 bulls remain on track for new 2024 highs (1.3846). The monetary policy divergence, also favors the upside. Markets may be anticipating two cuts from the Fed, but officials see just one [1]. The Bank of Canada on the other hand, has already delivered its first cut and its Governor hinted to more moves ahead. [2]
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 19 Jun 2024 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20240612.htm | |
| Retrieved 01 Jul 2024 https://www.bankofcanada.ca/2024/06/opening-statement-2024-06-05/ |
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