The economy of Canada remains stable.

The Canadian dollar has weakened slightly due to the strength of the US economy, which has bolstered the US dollar. However, various indices in Canada continue to show sluggish trends. The ISM Manufacturing Index in the United States increased to over 50 for the first time since 2022, indicating expansion in the industrial sector and signaling that inflation pressures might not be fully subdued. Additionally, rising crude oil prices have supported the Canadian dollar, driven by increased foreign currency inflows from Canada's exports.

The Manufacturing PMI increased by 0.1 from the previous month to 49.8 in March, marking the 11th consecutive month of contraction. New orders have shown the smallest rate of decline in 13 months. Challenges from higher raw material prices and borrowing costs have contributed to increased product prices. Nonetheless, there is significantly improved sentiment in the manufacturing sector, driven by substantial growth earlier in the year and expectations of future economic improvement.

Retail trade volume in Canada is forecasted to increase by 0.1% in February, rebounding from an estimated 0.4% decline in the previous month. In 2023, retail trade in motor vehicles and parts is expected to decline by 2.4% due to sustained losses in new car sales, partially offset by profits from the sale of used cars. However, sales of sporting goods and recreational equipment remain consistently popular.

The Canadian economy is expected to grow by 0.4% in February, driven by increased investment in oil and gas extraction. Despite ongoing contraction in the manufacturing sector, there are prospects for future growth as profitability improves following prolonged losses. The service sector continues to grow steadily, particularly in tourism and hospitality.

The yield on Canada's 10-year government bonds has risen above 3.68%, following the trend of US Treasury yields. Strong manufacturing data increases the likelihood of the US Federal Reserve extending its high-interest-rate policy, which supports higher yields. Despite the ongoing softening of Canada's manufacturing sector, preliminary estimates indicate a 0.4% expansion in GDP from the previous month, signaling positive prospects for the economy.

Techical analysis data (5H)

Resistance: 1.3572, 1.3584, 1.3591

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.3546 - 1.3553 but cannot break the support at 1.3553, you may set a TP at approximately 1.3584 and SL at around 1.3534 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.3572 - 1.3584, you may set a TP at approximately 1.3591 and SL at around 1.3546 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.3572 - 1.3584 but cannot break the resistance at 1.3572, you may set a TP at approximately 1.3546 and SL at around 1.3591 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.3546 - 1.3553, you may set a TP at approximately 1.3534 and SL at around 1.3584 or according to your acceptable risk.

Pivot point April 5, 2024 07:27 PM. GMT+7