**USD/CAD Daily Outlook: June 5, 2024 Analysis and Forecast**
Original Source: ActionForex.com – “USD/CAD Daily Outlook: June 5, 2024” by ActionForex Analysts
(https://www.actionforex.com/technical-outlook/usdcad-outlook/625696-usd-cad-daily-outlook-2306/)
The USD/CAD currency pair on June 5, 2024, shows meaningful technical developments, reflecting broader shifts in both U.S. dollar strength and Canadian dollar drivers, particularly influenced by oil prices and the outlook for central bank policy from both countries.
This comprehensive outlook revisits daily price action, short-to-medium-term technical structures, and contributes additional macroeconomic and geopolitical context to better understand the likely trajectory of the USD/CAD exchange rate.
**Current Price Structure and Technical Analysis**
As per the analysis by ActionForex on June 5, 2024, USD/CAD displayed some strength but was still within a consolidative pattern after a recent dip. Here’s a breakdown of the present technical positioning:
– Price action remained constrained below the near-term resistance level of 1.3784.
– Meanwhile, immediate support was found at 1.3608 during the June 4 trading session.
– The pair formed a modest rebound from this support area, though not yet implying strong bullish momentum.
**Short-Term Technical Outlook**
The short-term focus remains on whether USD/CAD can build up enough momentum to breach the 1.3784 resistance area, which marks the high for May 17, 2024. The market remains cautious ahead of the Bank of Canada (BoC) rate decision.
Key technical takeaways include:
– The pair is trading within a flag-like consolidation since peaking in late May.
– Short-term price structure suggests mild bullish bias, provided that the 1.3608 support holds.
– Immediate upward momentum will be validated on a sustained break above 1.3784, which could trigger a climb towards 1.3860 and possibly 1.3900.
If the pair fails to clear above 1.3784, it is vulnerable to further consolidation or correction. A move below the 1.3608 support could send the pair back toward 1.3500 or lower.
**Fibonacci and Trendline Influence**
– A Fibonacci retracement from the March 2024 low to the May 2024 high places key support at 1.3550 (38.2% retracement level).
– Trendline support originating from late February remains intact, and intersects around 1.3565.
– The Relative Strength Index (RSI) on the daily chart hovers near neutral, suggesting consolidation rather than a clear trend.
**Medium-Term Technical Outlook**
From a wider lens:
– The broader uptrend that started from the April 4 bottom at 1.3450 remains moderately intact.
– So long as the price stays above the higher-low of 1.3500 (formed in mid-May), it retains a bullish structure.
On a weekly chart perspective:
– Resistance remains at the 1.3800–1.3850 zone, which the pair has failed to breach since September 2023.
– Support structure is strong at 1.3400, formed off multiple rebounds since March.
**Fundamental Drivers Supporting USD/CAD**
1. **Central Bank Divergence**
One of the primary moving forces in USD/CAD over recent months has been diverging interest rate expectations between the Federal Reserve and the Bank of Canada:
– The Federal Reserve remains firmly in a higher-for-longer stance amid sticky core inflation and resilient labor market data.
– On the other hand, the Bank of Canada signaled earlier dovish tones due to softening inflation and slowing GDP prints.
As of June 5, analysts widely expect the BoC to initiate its first rate cut as early as July
Read more on USD/CAD trading.