Ichimoku analysis (4-Hour Chart)
Tenken-Sen- 1.22906
Kijun-Sen- 1.2367
USDCAD has lost more than 200 pips after forming a minor top around 1.2480 levels. The Fed dot plot projected that two rate hikes in 2023 are supporting the US dollar. The weaker than Canadian retails sales are putting pressure on this pair. The retail sales declined by -5.7% in Apr compared to an estimate of -5.1%. Markets eye US Durable goods orders, final GDP for further direction. Yesterday, Powell reiterated that the surge in inflation was transitory and this shows that there will not be any rate hike in the near term. Loonie hits an intraday high of 1.23145 and is currently trading around 1.2299.
WTI crude oil hits fresh year high yesterday after upbeat US crude inventory data. According to the US Energy Information administration, us crude inventories declined by 7.6 million barrels compared to a forecast of -3.6M barrels. The short-term trend is bullish as long as support $70 holds.
Technically, the pair faces near-term resistance at 1.2320. Any indicative break above will take till 1.2360/1.2400/1.2480. The significant support is around 1.2200. Any violation below will take to the next level to 1.2180/1.2120/1.20580.
Indicator (4-hour chart)
CAM indicator- Neutral
D4irectional movement index –Buying
It is good to buy on dips around 1.2170-725 with SL around 1.2120 for a TP of 1.2290.
