The Canadian Dollar (CAD) has seen a small dip, mostly due to a slight rise in the US Dollar (USD). The USD/CAD risk reversal pricing indicates changes, with the 3-month riskies hitting their highest premium for USD puts since 2009. Bank of Canada Governor Macklem and Finance Minister Champagne are expected to discuss key domestic issues like inflation and interest rates after the Banff G7 meeting. Recent core inflation data for April shows a June rate cut is unlikely, and market expectations for rate changes may also decrease.

USD/CAD Resistance Levels

The USD/CAD pair has slightly recovered from a recent low, but broader indicators still suggest a bearish outlook for the USD. Technical analysis identifies a resistance level around 1.39, with pressure forming near the 1.3745/50 support zone. Bitcoin followers are cheering a new high price, surpassing $110,000 for the first time. Retail sentiment is improving, but institutional investors are cautious due to uncertainties like trade tensions and US debt issues. The Canadian Dollar has weakened a bit, responding mainly to a stronger US Dollar. The increase in the USD/CAD exchange rate is notable, particularly the rising sentiment indicators. The 3-month risk reversal shows the premium for USD puts rising to levels not seen in 15 years. This indicates that those hedging or trading with derivatives are willing to pay more to protect against or take advantage of declines in the pair. This shift suggests a growing belief that the current strength of the greenback may be temporary or overstated due to broader concerns. Governor Macklem and Minister Champagne are expected to comment after their international discussions, focusing on domestic inflation and interest rates. The April inflation data, especially the core numbers, did not decline as expected, making a June rate cut less likely. There’s a belief that the central bank will not rush to ease unless there are clear signs of weakening price momentum. This might limit CAD’s downside in the short term.

Bitcoin Market Dynamics

The USD/CAD pair rose slightly from a tested zone but is not yet seen as a trend shift. Resistance remains strong, particularly around the 1.39 level, where previous rallies have stalled. Below that, the 1.3745/50 area is providing current support; a drop through there could lead to extended movements over several weeks. In a different scene, Bitcoin has reached a new historical peak, going over $110,000. This rally is widely celebrated, mainly among retail investors. However, larger players are more cautious, concerned not just about the price changes but also about broader instability like trade issues and US fiscal management. This difference in sentiment—retail enthusiasm versus institutional caution—is important to monitor, especially for those considering trades focused on momentum or volatility. The expectation continues to show potential upside, but enthusiasm from retail investors hasn’t translated into increased activity from large accounts. This suggests that any sharp price moves could be less stable and quickly reverse if economic policies or data shift. Looking ahead, there are many factors to consider—comments on interest rates, inflation reports, and positioning risks. Volatility sellers may need to be more selective, as underpriced risks could change values quickly. Create your live VT Markets account and start trading now.

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