The USD held steady against other major currencies in overnight trade as the Federal Reserve left US interest rates unchanged at 5.25%. Although the statement that accompanied the decision dropped the reference that inflation remains “elevated”, it suggested that “a sustained moderation in inflation pressures has yet to be convincingly demonstrated”
Canadian industrial product prices fell 0.5% in May, the first decline in seven months, due to the surging C$ offsetting higher energy prices.

The following technical analysis gives us a detailed lookout on what is expected to happen to the pair.

The buying point of USD/CAD is at 1.0570; based on double support on daily chart and changing trend of momentum oscillator.

- Fibonacci retracement 61.8% is the take profit at 1.0655
- Placing Stop Loss at 1.0530

To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages below the zero line, the shorter term moving average is faster than the long term and is pointing upwards. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market is in an oversold area.

The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it changes the direction and is on an uptrend. The Stochastic is in an oversold area and trying to break 20% line. Most of the indicators show us the strength of the US dollar against the Canadian dollar.

* The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.

By Finotec’s professional analyst,
Tony B.

dealingdesk@finotec.com