- US President Joe Biden and leading lawmakers failed to resolve the debt ceiling crisis.
- Investors are awaiting the US inflation report.
- More speculators are holding bearish bets against the loonie.
Today’s USD/CAD price analysis is bearish. The dollar was down on Wednesday after US President Joe Biden and leading lawmakers failed to resolve the debt ceiling crisis. However, the currency movements were minimal due to the anticipation of US inflation data later in the day.
–Are you interested in learning more about forex bonuses? Check our detailed guide-
During talks on Tuesday, Biden and House of Representatives Speaker Kevin McCarthy remained at odds over raising the $31.4 trillion US debt limit. With only weeks before the United States might face an unprecedented default, they agreed to have further discussions and instructed their aides to meet daily.
On Friday, Biden, McCarthy, and the three other top congressional leaders will reconvene.
The greenback dipped slightly in Asian trade, reflecting nervousness as investors waited for the US inflation data. Nevertheless, the safe-haven currency retained most of its gains from the previous session.
On Tuesday, the Canadian dollar remained relatively unchanged compared to the US dollar, consolidating its recent gains. According to the latest US Commodity Futures Trading Commission data as of May 2, speculators held bearish bets against the loonie, with net short positions increasing to 50,096 contracts from 43,791 the prior week.
The price of oil, one of Canada’s significant exports, concluded 0.8% higher at $73.71 a barrel. Market participants assessed the US government’s plans to refill the emergency oil reserve while anticipating higher seasonal demand.
USD/CAD key events today
Investors anticipate the US inflation report. If the report shows stronger-than-expected figures, it could challenge the Federal Reserve. The Fed had recently signaled the possibility of a break in its aggressive tightening cycle, following ten successive rate hikes since March 2022.
USD/CAD technical price analysis: Bears poised to resume the downtrend
The 4-hour chart suggests a bearish bias for USD/CAD. The price remains well below the 30-SMA, and the RSI indicator is below 50, confirming bearish momentum. After a sharp drop, the price found support just above the crucial 1.3300 level, prompting a retracement that tested the resistance at 1.3400.
–Are you interested in learning more about AI trading brokers? Check our detailed guide-
However, time will tell whether the bulls can break past this level. Bears seem poised to resume control and push the price back to the 1.3300 support.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money