USDCAD bounces higher today but only to the 50% midpoint of the 2-month trading range

As the clock ticks to the end of the trading week, the USDCAD has moved higher after reaching a new low for the week earlier in the trading day.

On the way to the low, the price did move back below its 200 bar moving average on the 4-hour chart at 1.3687. It also fell below the broken 38.2% retracement of the trading range since mid April (two month trading range). The level also is at 1.3687. The failure on the break of both those levels disappointed that the sellers and has led to a bounce back rally in the North American session.

That move to the upside has taken the price back up to test the 50% midpoint of the two-month trading range at 1.3717. So far the price has stalled against that the level.

The move back toward the 50% midpoint just that neither buyers or sellers are willing to take control.

Fundamentally, the Bank of Canada did cut rates at their last interest-rate decision becoming one of the first G-7 countries to do so. However, after peaking within a swing area between 1.3784 1.3803, the price has been up and down over the last seven or so trading days. Moreover, the current price is below the 50% of the two-month trading range. On the positive side it is above the 200 bar moving average on the 4-hour chart at 1.3687, and is trading above and below the 100-bar moving average on the 4-hour chart of 1.37079.

So buyers and sellers seem to be pointing into next week where perhaps there is more of a shift in the technical bias one way or the other.

This article was written by Greg Michalowski at www.forexlive.com.

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    Forexlive Americas FX news wrap 21 Jun: The USD moves higher helped better flash S&P

    The week is coming to a close with the USD being the strongest of the major currencies. The JPY is the weakest.The gains in the greenback today were helped by stronger-than-expected flash PMI data that saw services index rise to 55.1 vs 53.7 expected, and the manufacturing rise to 51.7 above estimate of 51.0.

    For the USDJPY, it rose to the highest level since the April peak when the price traded to 60.208. The high price today reached 159.774.

    Going into the new trading week in the USDJPY, a move above the 160.208 level would take the price of the pair to the highest level going back to 1990 where the high for the year reached to 160.40. Move above that level, and the USDJPY is trading at the highest level since January 1987. Those levels are the progression given more upside momentum in the new week.

    Of course, the risk exists that the BOJ intervenes. When the price moved above 160.00 the last time, intervention sent the pair quickly down to 155.19 in short order. Another intervention move sent the price from 157.58 to 152.99. The current price is between the two extremes that attracted intervention.

    Today, BOJ and Japan officials tried to jawbone the JPY higher( USDJPY lower), but was unsuccessful. Will they be inclined to be more direct next week?

    For the trading week, the USD was mixed. The greenback rose vs the JPY, EUR, GBP, CHF, CAD and NZD and fell vs the CAD and AUD. Look at the major pairs:

    • USDJPY rose 1.51% (USD higher)
    • EURUSD fell -0.11% (USD higher)
    • GBPUSD fell -0.342% (USD higher)
    • USDCHF rose 0.46% (USD higher)
    • USDCAD fell -0.33% (USD lower)
    • AUDUSD rose 0.38% (USD lower)
    • NZDUSD fell -0.39% (USD higher)

    The greenback rose vs the CHF despite the SNB cutting rates this week by 0.25%. The BOE kept rates unchanged but the statement was somewhat dovish and flash PMI data was weakish today.

    In other markets today, the US stocks ended the day mixed. For the 2nd consecutive day, the Dow is ending higher (only marginally), while the S&P and the Nasdaq indexes moved lower.

    The final numbers for the day are showing:

    • Dow Industrial Average average rose 15.57 points or 0.04% at 39150.34.
    • S&P index fell -8.55 points or -0.16% at 5464.61
    • NASDAQ index fell -32.23 points or -0.18% at 17689.36

    The small-cap Russell 2000 rose 4.64 points or 0.23% at 2022.03.

    For the trading week the S&P and Dow Industrial Average average rose while the NASDAQ closed the week virtually unchanged:

    • Dow Industrial Average average, +1.45%
    • S&P index, +0.61%
    • Nasdaq index rose 0.48 points which is less than 0.00%, but technically an up week by the slimmest of margins.

    This week, the S&P and Nasdaq set new all time high close levels:

    • S&P new all-time high close is 5487.02
    • Nasdaq new high close is now at 17862.23

    In the US debt market:

    • 2-year yield 4.736%
    • 5-year yield 4.276%.
    • 10-year yield 4.257%.
    • 30-year yield 4.399%

    For the trading week:

    • 2 year yield rose 2.9 basis points
    • 5 year yield rose 3.6 basis points
    • 10-year yield rose 3.4 basis points
    • 30- year yield rose 4.9 basis points

    Thank you for your support. Have a great weekend

    This article was written by Greg Michalowski at www.forexlive.com.

    Key Events and Releases to Watch Next Week in Trading

    • Mon, Jun 24, 3 AM ET. USD: FOMC member Waller speaking
    • Mon, Jun 24, 1:45pm CAD: BOC Gov Macklem Speaks

    Tuesday June 25

    • Tue, Jun 25, 8:30am CAD: CPI m/m (Estimate: 0.3%, Previous: 0.5%), Median CPI y/y (Estimate: 2.6%, Previous: 2.6%),Trimmed CPI y/y (Estimate: 2.8%, Previous: 2.9%)
    • Tue, Jun 25, 10:00am USD: CB Consumer Confidence (Estimate: 100.2, Previous: 102.0)
    • Tue, Jun 25, 10:00AM USD: Richmond Fed manufacturing index. Estimate 2.0. Previous 0.0

    Wednesday, June 26

    • Weds, Jun 26, 9:30pm ET (Tuesday) AUD: CPI y/y (Estimate: 3.5%, Previous: 3.6%)

    Thursday, June 27

    • Thu, Jun 27, 5:30am GBP: BOE Gov Bailey Speaks
    • Thu, Jun 27, 8:30am USD: Final GDP Q1 q/q (Estimate: 1.4%, Previous: 1.3%)
    • Thu, Jun 27, USD: Unemployment Claims (Estimate: 240K, Previous: 238K)
    • Thu, Jun 27, USD. Durable goods orders (Estimate -0.1%, previous 0.6%), Core durable goods orders (Estimate 0.1%. Previous 0.4%
    • Thu, Jun 27, 10:00am USD: Pending Home Sales m/m (Estimate: -7.7%, Previous: -7.7%)

    Friday June 28

    • Fri, Jun 28, 8:30am CAD: GDP m/m (Estimate: 0.3%, Previous: 0.0%)
    • Fri, Jun 28, USD: Core PCE Price Index m/m (Estimate: 0.1%, Previous: 0.2%)
    • Fri, Jun 28, 10:00am USD: Revised UoM Consumer Sentiment (Estimate: 65.9, Previous: 65.6)

    In addition to the above the US treasury will auction off:

    • June 25, 2-year notes
    • Jun 26: 5 -year notes
    • Jun 27: 7-year notes

    This article was written by Greg Michalowski at www.forexlive.com.

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