Daily Market Insights



Greenback looks to recover

The Federal Reserve's interest rate increases have been gradual. We shall have to wait for what is being planned for its $4.5 trillion balance sheet.

The central bank have already been reducing its bond holdings at a steady pace given the uncertainty about the impact on financial markets, monetary policy and the economy.

Investors may get another insight into the Fed’s plans on May 24 when it releases the minutes of this month’s policy-making meeting. At the previous meet on May 2-3, the central bank held interest rates steady while still remaining on course for possible two more rises in 2017.

Minneapolis Federal Reserve Bank President Neel Kashkari yesterday stated that using interest rate hikes when not necessary can cause unwanted issues and are hard to identify. Any such hikes would likely do more damage to them than any good.

Canadian Manufacturing sales increased 1.0% in March, which saw higher sales in the transportation equipment and food industries.

Sales in the transportation equipment industry rose 2.1% in March, following some decline in recent months. In the food industry, sales rose up 2.6% in March. Total inventories increased 1.2% in March.

Intraday bias in USD/CAD is trading above 1.3588 level which gets good support base after having been in a downtrend and found some support where the prices are unsuccessful in breaking the support area. This reinforces the expectations of changing towards the bullish bias in the upcoming period, and the way is open for the pair to head towards the recently recorded top on the near term basis.

The price provided a new positive close above the level, confirming its affection by the domination of the bullish bias in the near and medium period. We keep waiting for the price to achieve the target at 1.3678. The price gets its positive momentum with stochastic stability above the 50.0 level confirming its attempt to reach the previously suggested target to face the level.

Though the 50EMA and 100SMA are below current levels, the pair found some support at the latest trend line support, hence we’d be expecting resumption of larger up trend from current levels.

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