US Dollar Starts the Week Strong — North American Mid-Week Market Update

The Greenback has recovered some of its Sunday open losses, as the DXY touched a low of 98.65. The Dollar has rallied well in the past two sessions as Memorial Day gave strength to the USD.

A contributor to this USD strength have been recent comments from Japan's Mister of Finance announcing that they would supply less JGB's - the buying of the latter weakened the JPY and some rebalancing towards US Assets.

The Dollar is coming off a rough week after Friday, 16th May, Moody’s Credit Rating Downgrade led to some broad USD selling, which led to Bitcoin consolidating above prior all-time highs and Gold making a comeback towards $3,300.

The Canadian Dollar on the other hand has had a fairly muted performance on the week. It's up on a week-over-week look against most majors but lost 1.17% against the USD since Monday.

Major North-American stock indices are all up on the week, with the Nasdaq 100 leading the charge.

You can take a look at key intra-day levels for USDCAD further in the article.

The USD has seen broad strength against all majors after starting the week down small - A strong Consumer Sentiment report surely contributed to the mix.

As seen before, the JPY has been the worst performer of all majors, followed by the Australian Dollar. The RBA cut rates last week giving some fundamental weakness to the currency.

Other currencies haven't depreciated too much versus the Greenback, as this week hasn't seen the release of major data, expect more volatility as we approach the end of the week.

The Loonie has had a mixed performance over the week.

It's broadly unchanged on the week against most majors though it is lagging on the USD and the NZD that is holding strong even after yesterday evening's cut from the RBNZ.

The CAD is also up against the AUD and the JPY but that is mostly due to the weakness of the two Asian Pacific currencies.
No major data came in Canada in the beginning of this week, with some misses on low-tier data - weak Manufacturing and Wholesale trades.

USD/CAD broke out from the descending channel formed throughout the past week (in blue).

Prices are now contained in a 300 pip range between the 200 MA at 1.3850 and the 20 MA at 1.3820 - a key level to watch for is the immediate pivot at 1.38150.

A daily close above hints at a test of upper resistances, while a close below will point towards a retest of the channel situated at the Support 2


Key technical zones to look out for:

• S1: 1.3810 to 1.3820
• S2: 1.3790 to 1.3800
• S3: 1.3720 to 1.3730

• R1: 1.38450 to 1.38550
• R2: 1.38850 to 1.39
• R3: 1.39300 to 1.39400

Coming up right now is the release of the FOMC Minutes where we will get a better idea at the different views within voting members.
You can access the upcoming report right here.

Thursday 29 we will see the release of US Q1 GDP numbers expected with a Year on Year reading expected at 3.7% and Jobless claims expected at 230K.
The afternoon we will see speeches from Goolsbee, Kugler and Daly in that order.
Goolsbee and Kugler are voters, with the former having a relatively dovish position - it will be interesting to see what he has to say.

Friday 30 has more key data with the release of US Core PCE expected at 2.5% Y/Y, 0.1% Month on Month.
We will also see the release of Canadian GDP expected at 1.7% annualized - a beat could contribute for some more strength in the CAD while a miss would just amplify the move from this week.
Do not miss also the Chicago PMI at 9:45 and U-of-Mich Consumer Sentiment at 10:00.

Safe Trades!