The cautious market mood remains with key US data due

The cautious market mood remains with key US data due

USD/CAD => The pair rises towards 1.2850
Bitcoin => The crypto rises towards 30k
Alibaba => The stock trades around 2022 lows


USD/CAD rises ahead of US GDP, CAD retail sales

USD/CAD finished flat yesterday as the USD traced treasury yields higher.

The pair shrugged off the minutes of the latest Fed meeting, which revealed little that the market didn’t already know. The Fed is expected to raise interest rates by 50 basis points at the June and July meeting. The loonie failed to find support from oil prices, which rose modestly yesterday. 

Looking ahead, US economic data will remain in focus with the release of U.S. Q1 GDP data which is expected to confirm the -1.4% contraction on an annualized basis. Initial jobless claims will also be in focus.

Further signs that the jobs market could be slowing could hurt demand for the USD. Meanwhile, Canadian retail sales are expected to rise firmly in March after stalling in February. Strong sales could lift CAD.

Canada Retail sales

US GDP

Expected: 1.4 (1.3)

Expected: -1.4% (0)

Previous: 0.1

Previous: -1.4%

The cautious market mood remains with key US data due chart

Where next for USD/CAD?

USD/CAD has pulled back from 1.3075 high reached mid-May and is consolidating.

1.2770 caps the downside while the 20 sma around 1.2875 is limiting the upside. The pair continues to trade above its multi-month rising trendline and the RSI is attempting to rise over 30.

A breakout trade could see the buyers looking for a move over the 20 sma at 1.2875 to test horizontal resistance at 1.29 and 1.2960 before bringing 1.3075 back into play. On the downside, a break below 1.2770 will expose the 100 sma and rising trendline support at 1.27. Beyond here 1.26 comes into play.

Bitcoin

Bitcoin has been tracking US equities closely over the past few months and yesterday was no exception.

US stocks rose after the Fed minutes confirmed what was already known, supporting Bitcoin. News that Turkey is working on legislation that would give it greater control over the cryptocurrency market and which could include taxes on some digital currency transactions is having little impact on cryptos.

BTC/USD continues to trade within a familiar range with a breakout above $31.5, opening the door to further gains or a move below 29k, prompting a deeper selloff.

Alibaba fiscal Q4 earnings preview

A combination of the regulatory overhaul and China’s zero-COVID policy have contributed to China’s growth decelerating, and commerce is feeling the impact. 

Chinese giant Alibaba will release Q1 earnings ahead of the US open today. The results come as the share price trades around its lowest level in almost six years. Sector peer Tencent set the tone with disappointing earnings and flat revenue, and Alibaba is broadly expected to follow suit.

Earnings are expected to drop a massive 31% per AD to RMB7.10, although revenue is expected to rise 7% YoY to RMB200,594 million. Short-term guidance is expected to show continued headwinds across the business’s various segments.

Support can be found at 73.28 (2022 low) and 59.25 (2016 low).

Resistance for the pair can be seen at 94.50 (May 17 high) and 102.70 (May high).

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