Bank of Canada Might Reduce Interest Rates Further.

The Canadian dollar weakened beyond 1.375 CAD per USD amid concerns over rising domestic debt, as the government plans to increase annual spending to 608.7 billion CAD by 2028, raising worries about the growing public debt. Additionally, BoC Governor Tiff Macklem recently stated that the central bank could lower interest rates without waiting for a rate cut from the Fed, indicating the potential for BoC rate cuts.

Canada’s manufacturing PMI dropped to 49.3 in May from 49.4 in April, with data indicating declining output and new orders at a faster rate due to uncertain economic and political environments. Demand fell from both domestic and international customers, leading to reduced purchasing activity, while production costs rose for the 12th consecutive month, albeit at a slower pace, reflecting ongoing challenges in the manufacturing sector.

Canada’s services PMI rose to 51.1 in May from 49.3 in April, marking the first expansion in the service sector in a year. This growth was driven by an increase in new business, resulting in more job creation and employment. However, cost pressures remained, mainly due to higher wages to attract applicants and salary adjustments, but these costs were offset by higher service prices.

Canada reported a trade deficit of 1.05 billion CAD in April, lower than the market forecast of a 1.4 billion CAD deficit, boosted by a 2.6% increase in exports to 64.5 billion CAD, driven by the export of metal and non-metallic mineral products, while industrial machinery exports declined slightly. Imports to Canada rose 1.1% to 65.5 billion CAD in April from 64.8 billion CAD in the previous month, due to increased imports of metal, non-metallic minerals, motor vehicles, and parts.

Canada’s unemployment rate rose to 6.2% in May from 6.1% in the previous month, with the number of unemployed increasing by 28,000 to 1.365 million, particularly among the working-age population. Meanwhile, net employment rose by 26,700 to 20.518 million.

Techical analysis data (5H)

Resistance: 1.3715, 1.3725, 1.373

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.3695 - 1.37 but cannot break the support at 1.37, you may set a TP at approximately 1.3725 and SL at around 1.3686 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.3715 - 1.3725, you may set a TP at approximately 1.373 and SL at around 1.3695 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.3715 - 1.3725 but cannot break the resistance at 1.3715, you may set a TP at approximately 1.3695 and SL at around 1.373 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.3695 - 1.37, you may set a TP at approximately 1.3686 and SL at around 1.3725 or according to your acceptable risk.

Pivot point June 19, 2024 09:0 PM. GMT+7