- The markets await the Carney-Trump meeting and security meeting.
- US ISM Services on upward surprises; Canadian Ivey PMI Tuesday
- The USD / CAD remains technically fragile as the lower pressure is built below the 20 -day SMA
The USD / CAD marches on the water while investors weigh the geopolitical importance of the scheduled meeting on Tuesday between Canadian Prime Minister Mark Carney and US President Donald Trump, as well as a series of strong impact economic versions should shape the prospects for monetary policy.
At the time of the editorial staff of the writing moment, the pair is negotiated nearly 1,3819, holding just above the key support while market players adopt a cautious position before political and macroeconomic catalysts.
Canada – US Talks: a central moment for bilateral relations
Although the news of the next Carney-Trump meeting has temporarily reduced the tensions resulting from recent pricing disputes, Prime Minister Carney's remarks suggest a fundamental re-evaluation of the Canadian-American relationship on Friday.
Speaking at a press conference in Ottawa, Carney said that he provided “difficult but constructive” discussions with President Trump, aimed at redefining cooperation in the business, defense and continental strategy.
“Our old relationship, based on increasing increasing integration, is over,” said Carney. “The automatic alignment era is behind us. We are going to Washington with a clear view – we will protect Canadian jobs, and we will put pressure for equity.”
The Tuesday summit should address two major areas: the restructuring of commercial provisions in the middle of the increase in American protectionism and the future of shared security commitments, in particular in the context of the Organization of the North Atlantic Treaty (NATO) and the North American defense. “There is shared security and economic interests,” noted Carney, “but the way to follow must be redefined.” The result of the meeting may have immediate implications for cross -border commercial expectations and could weigh on the feeling of the Canadian dollar (CAD) depending on the tone and the progress of negotiations.
Political perspectives and economic indicators shape the USD / CAD feeling
Beyond geopolitics, the USD / CAD is shaped by a series of upcoming economic versions and trends in raw material prices. In Canada, investors are waiting for the IVEY in April IVEY purchase managers (PMI), due on Tuesday. The index will provide a timely snapshot in commercial activity, and any gap in relation to expectations could influence short -term perspectives for the Canadian economy and Banque de Canada's political directives.
In the United States, the Institute for Supply Management (ISM) Services Purchase Managers Index (PMI) surprised on Monday on Monday, showing a reading of 51.6 for April. This exceeded the consensual forecasts of 50.6 and marked an improvement compared to the 50.8 of the previous month. The figure reflects a moderate expansion in the services sector, which includes the majority of the American gross domestic product, and can temper the speculation of the policy on Wednesday on Wednesday.
In addition, moderate oil prices continue to drop slightly downward pressure on the Canadian dollar, given the essential role of the goods in the Canada export economy. Without a single dominant story, these variables collectively strengthen a narrow and undecided commercial beach in USD / CAD.
The sloping momentum is built while the USD / CAD flattens above the fibonacci support
The USD / CAD is currently consolidated above 1.3794, the Fibonacci retracement level of 38.2% derived from the lowest in September to the Mars summit.
This zone represents a key technical threshold in the wider corrective movement. The pair has repeatedly tested this level without convincing rebound, indicating a deterioration of the bullish momentum and an increasing risk of deeper withdrawal.
The simple 20 -day mobile average (SMA), currently at 1.3888, continues to cap prices and strengthen the short -term lower pressure. Since mid-April, the USD / CAD has remained below this mobile average, each attempt at rally has not broken or close above, a sign that the sellers remain in the control of the short-term trend.
Immediate downward support is 1,3760, which acted as a pivot during the past consolidation phases. A clear break below it would probably expose the next main support area nearly 1,3420, corresponding to the low swing in November 2024 and marking a more substantial retirement of the previous uptime leg.
Enimony indicators strengthen cautious tone. The relative force index (RSI) follows nearly 36, which suggests that the dynamics persist, but the pair is not yet in territory occurring. This leaves room for subsequent sale without requiring technical rebounds, in particular if fundamental catalysts, such as the Carney-Trump summit or the policy declaration of the Federal Reserve, stimulate renewed volatility.
In summary, the technical landscape promotes a lower bias while the price remains below the 20 -day SMA and will not recover key resistance almost 1.3880. A rupture less than 1,3760 would probably confirm the downward continuation, while any counting above the 20-day average could point out a potential recovery to the Fibonacci level at 50% to 1.3985.
Daily graphic USD / CAD
Canadian dollar FAQ
The key factors at the origin of the Canadian dollar (CAD) are the level of interest rate set by the Bank of Canada (BOC), the price of oil, the largest export in Canada, the health of its economy, inflation and trade balance, which is the difference between the value of exports of Canada compared to its imports. Other factors include the feeling of the market – that investors have more risky assets (risk) or are looking for safety havens (risk) – with the risk for the positive CAD. As the most important trading partner, the health of the American economy is also a key factor influencing the Canadian dollar.
The Bank of Canada (BOC) has a significant influence on the Canadian dollar by fixing the level of interest rate that banks can lend each other. This influences the level of interest rate for everyone. The main objective of the BOC is to maintain inflation to 1 to 3% by adjusting increased or declining interest rates. Relatively higher interest rates tend to be positive for CAD. The Bank of Canada can also use a quantitative softening and tightening to influence credit conditions, with the old cad-negative and the last positive frame.
The price of oil is a key factor with an impact on the value of the Canadian dollar. Oil is the largest export in Canada, so the price of oil tends to have an immediate impact on CAD value. Generally, if the price of oil increases, the CAD also increases, because the overall demand for money increases. The reverse is the case if the price of oil decreases. The higher oil prices also tend to lead to a greater probability of a positive trade balance, which also supports CAD.
Although inflation has always been considered a negative factor for a currency because it reduces the value of money, the reverse was in fact the case in modern times with the relaxation of cross -border capital controls. A higher inflation tends to lead central banks to set up interest rates that attract more capital entries from global investors looking for a lucrative place to keep their money. This increases demand for local currency, which in the case of Canada is the Canadian dollar.
Macroeconomic data versions assess the health of the economy and may have an impact on the Canadian dollar. Indicators such as GDP, Manufacturing and PMIS services, employment and surveys on consumer feelings can all influence CAD management. A strong saving is good for the Canadian dollar. Not only does it attract more foreign investment, but it can encourage the Bank of Canada to install interest rates, which leads to a stronger currency. If the economic data is low, however, CAD is likely to decrease.
