The USD/CAD exchange rate remained in a tight range on Tuesday morning as traders reacted to the upcoming Canadian consumer inflation data. It was trading at 1.3960, up by 1.50% from its lowest point this year.

Canada inflation data ahead

The USD/CAD exchange rate wavered ahead of the upcoming Canada inflation data. Economists polled by Reuters expect the data to show that the headline consumer inflation rose from 0.3% in March to 0.5% in April. 

On the positive side, analysts expect that the CPI fell from 2.3% in March to 1.6% on a YoY basis. If this is accurate, it will mean that Canada’s inflation will have moved below the Bank of Canada’s (BoC) target of 2.0%.

The core CPI, which excludes the volatile food and energy products, is expected to come in at 0.2% monthly and 2.4% annually. 

These numbers will likely push the BoC to deliver more interest rate cuts in the coming meetings. The bank has already cut rates seven times in this cycle, moving from 5% in April last year to 2.75%. The bank will likely stop cutting when rates move to 2.0%.

Read more: Bank of Canada holds interest rate at 2.75% amid global trade uncertainty

The BoC has cut interest rates to support the economy by lowering borrowing costs. These cuts have helped to support the economy as recent data revealed that the economy expanded by 1.7%, helped by higher consumer spending on services like telecommunication and rent.

Economists expect the Canadian economy to continue slowing because of Donald Trump’s tariffs. He added a 25% tariff on most items in his bid to lower the US trade deficit and attract foreign investments.

The ongoing crude oil prices will also hurt the Canadian economy. Brent crude oil dropped to $65.5, while West Texas Intermediate has moved to $62. Lower oil prices hurt Canada’s economy because it is the fourth biggest producer.

US credit rating downgrade

The USD/CAD exchange rate is also reacting to Moody’s recent US credit rating downgrade. In a report on Friday, the agency slashed the rating from AAA to AA1, citing the soaring public debt and the debt servicing costs. 

While a credit rating downgrade is always a big thing, there are signs that the Moody’s one will have no major impact since the US lost its Triple A rating in 2011 when S&P Global slashed it.

Analysts anticipate that the Federal Reserve will not cut in the next two meetings, making the pair a good carry trade. In this, investors are borrowing the low interest rate Canadian dollar and investing in the higher-yielding Canadian dollar.

USD/CAD technical analysis

The daily chart shows that the USD/CAD exchange rate wavered on Tuesday as traders waited for the Canadian inflation data and statements by top Fed officials like Susan Collins and Raphael Bostic. 

It was trading at 1.3957, where it has been stuck at in the past few days. The pair has remained below the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bears are in control for now.

On the positive side, the USD/CAD pair has formed a small bullish flag pattern, a continuation sign. This pattern comprises of a vertical line and some consolidation and is one of the most bullish patterns in technical analysis.

Therefore, the USD/CAD forecast is neutral, with the key support and resistance levels being at 1.3900 and 1.4100. A move below the support at 1.3900 will point to more downside. 

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The ASX 200 Index held steady on Tuesday after the Reserve Bank of Australia (RBA) delivered its interest rate decision. It was trading at A$8,325, up by 16.5% from its lowest point in April this year. 

RBA interest rate decision

The ASX 200 Index rose slightly after the RBA decided to cut interest rates by 0.25%, moving them from 4.10% to 3.85%. It was the second time that the bank has slashed rates in the current cycle. 

In a statement, Governor Michele Bullock justified the cut by pointing to recent data that showed that inflation continued to ease. The most recent data showed that the trimmed mean Consumer Price Index (CPI) moved below 3% for the first time since 2021. This means that the figure has moved within the target band of 2% and 3%. The bank said:

“With inflation expected to remain around target, the Board therefore judged that an easing in monetary policy at this meeting was appropriate. The Board assesses that this move will make monetary policy somewhat less restrictive. It nevertheless remains cautious about the outlook.”

The stock market typically does well when interest rates are cut for three main reasons. First, lower interest rates make it cheap for companies to borrow money, lowering their interest expense. They also lower the borrowing costs for consumers, leading to higher spending over time. 

Second, lower rates make government bonds less attractive, triggering a risk-on sentiment among investors. The ten-year yield of Australian government bonds dropped to 4.46% on Tuesday, down from 4.60% earlier this month. Similarly, the 30-year yield dropped to 5.0% from this month’s high of 5.2%. 

Third, lower rates lead to a risk-on sentiment among investors in their quest for higher returns. This, in turn, leads to higher demand for equities since they are often viewed favorably.

Analysts anticipate the RBA will pause its interest rate cuts in the next meeting in July. Most of them are now pricing in two more cuts this year, which will bring the benchmark rate to 3.35%.

US and China truce

The ASX 200 Index has also done well in the past few weeks because of the trade negotiations between the US and China. 

After a two-day meeting in Switzerland, the two countries decided to de-escalate by cutting their tariffs. The US lowered tariffs on Chinese goods to 30% from 145% earlier on. China slashed its tariffs on US goods to 10%. 

A trade deal between the two countries matters because of the vast amount of trade that Australian companies do with China. Most of them count China as the largest market because of its purchases on items like coal and iron ore. 

Most ASX 200 Index companies were in the green on Tuesday. Technology One was the best-performing company as the stock jumped by 10.5%. Parenti Global, South32, Austal, Wisetech Global, and Resolute Mining rose by over 2%.

Australian bank stocks also jumped after the RBA decision, with ANZ Holdings jumping by 2.15% and NAB rising by 1.83%.

ASX 200 Index analysis

ASX 200 Index chart | Source: TradingView

The daily chart shows that the ASX 200 Index has rallied in the past few weeks, moving from a low of $7,146 in April to $8,340. The 100-day and 50-day moving averages have made a bullish crossover. 

Top oscillators like the Relative Strength Index (RSI) and the Stochastic have all pointed upwards, a sign that it has the momentum.

Therefore, the index will likely keep rising as bulls target the key resistance level at $8,625, which is about 3.40% above the current level. 

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Mullen Automotive stock price jumped by more than 100% on Monday, making it one of the top companies in Wall Street. MULN stock jumped to a high of $0.4805 on Monday, its highest point since April 29. It has jumped by over 212% from its lowest level this month.

Why MULN stock price surged

Mullen Automotive is an electric vehicle company that has lost its shine in the past few years. Its stock has plunged by almost 100%, bringing its market capitalization to less than $9.6 million.

At its peak, the company had a market cap of over $600 million as investors piled into EV companies. The high stock price also helped the company to acquire several companies, including Bollinger Motors, Electric Last Mile Solutions, and Romeo Power Assets. 

Mullen Automotive recently acquired battery equipment from Nikola, the bankrupt hydrogen truck company. 

The challenge, however, is that Mullen Automotive has been a cash incinerator and its vehicles have not become highly popular. 

Mullen stock price surged on Monday after the company published an SEC filing saying that it would delay its audited financial results. However, the company also released the unaudited results, which showed that its revenue will be $4 million.

Mullen also said that it expected to narrow its loss from $171 million to $53 million as the company reduced its research and development spending. This reduction was understandable as the company has now moved to building and selling its vehicles.

Mullen Automotive attributed the delayed results into more analysis because a court placed Bollinger into receivership because of its high debt load. Also, the delay was because of the potential transfer of the Mishawaka facility to the settlement agreement. 

Therefore, the MULN stock price surged as investors cheered the improved financial performance and the demonstration that its business was doing well. This performance was further amplified by the fact that it is a highly shorted penny stock.

Is Mullen a good investment?

We have been warning about Mullen Automotive for many years, as you can see here, here, and here. 

The most important bearish case is that the company does not have the balance sheet to sustain its cash burn. 

For example, the recent preliminary numbers showed that the company will have a net loss of over $54 million in the second quarter. That is a big number for a company that lacks a supportive balance sheet, with the most recent results showing that it had just $2.3 million in cash and equivalents. 

It also has $10 million in debt, short-term debt of over $3.2 million, and accrued expenses of over $37 million. 

Some companies can operate and thrive with such a balance sheet. For that to happen, they need to have a higher stock price, which allows them to raise cash by selling shares. In Mullen Automotive’s case, its stock has a market cap of less than $10 million, making it hard to raise cash.

Read more: Mullen Automotive could be the next Fisker and Lordstown Motors

MULN stock price analysis

The daily chart shows that the MULN share price has been in a free fall for a long time as concerns about its future rose. It has remained below all moving averages and is now hovering at its all-time low. 

Short squeezes are common for troubled penny stock companies like Mullen Automotive, which explains why it surged on Monday. The long-term outlook for the stock is bearish as bankruptcy risks remain. 

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Vodafone share price rose in London on Tuesday after the company published encouraging results and launched its buyback program. VOD stock soared to a high of 72.5p, up by 15% from its lowest point this year.

Vodafone share price rises after share buyback launch

Vodafone’s share price jumped after the company released its financial results for the 2025 financial year on Tuesday.

A key part of its numbers is that the company launched a plan to repurchase shares worth €2 billion, a sizable amount for a company valued at around $24 billion or £17 billion.

Share repurchases benefit investors by reducing the number of shares in circulation, which in turn leads to a higher earnings per share (EPS). In this, investors will typically receive more money when a company pays its dividends.

Vodafone’s revenues rose by 2% in the last financial year to €37.4 billion as its turnaround efforts continued to work. Its service revenue rose by 2.8% to €30.7 billion, while the other segment deteriorated to €6.69 billion.

The company also received €13.3 billion in proceeds after selling its Italian and Spanish businesses. It also continued disposing of its stake in Vantage, the publicly traded cell tower company it spun out a few years ago. In a statement, CEO Margherita Della Valle said:

“Looking ahead, we expect to see broad-based momentum across Europe and Africa, and for Germany to return to top-line growth during this year. This is reflected in our guidance for profit and cash flow growth for the year ahead.”

Read more: Top FTSE 100 shares to watch: Vodafone, ICG, BT Group, EasyJet

Germany business to resume its growth

The company now expects that its crucial German business will return to growth this year after its revenue fell by 5% in FY25. This slowdown happened because of the MDU TV switching law that gave tenants in multiple dwelling units to choose their own TV and broadband providers. 

Other parts of Vodafone’s business did well in the last financial year. The UK organic service revenue rose by 1.9%, a trend that may continue this year following its merger with Three. Vodafone’s revenue grew in other parts of Europe and in Africa. 

The management hopes that its business will continue growing this year. For example, the guidance is that its adjusted EBITDAaL will be between €11 billion and €11.3 billion, a slight increase from the €11 billion it made last year. 

The company also sees its adjusted free cash flow being between €2.6 and €2.8 billion, higher than the previous €2.5 billion.

Vodafone’s management hopes that the turnaround efforts made in the last two years will pay off. These strategies have involved laying off 10,000 workers and selling its business in key countries like Spain and Italy.

The company also hopes that these efforts will make its dividend more stable and attractive. It has a dividend yield of about 7.50%, much higher than that of other companies in the FTSE 100 Index.

Read more: Vodafone share price rally has stalled: buy, sell, or hold?

Vodafone stock price technical analysis

The weekly chart shows that the VOD share price has remained in a tight range in the past few months. It has formed a symmetrical triangle pattern whose two lines are about to converge. A bullish or bearish breakdown typically happens when this convergence nears.

The MACD indicator has moved above the zero line, while the Relative Strength Index (RSI) has moved above the neutral point at 50. 

Therefore, the Vodafone share price will likely have a bullish breakout as investors target the key resistance point at 80.95p, the highest swing on May 2nd 2023. A move below the support at 67p will invalidate the bullish outlook.

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Rolls-Royce share price surged to a record high this week as the momentum that started in 2020 gained steam. It jumped to a high of 820p on Tuesday, bringing the year-to-date gains to 45%. It has soared by 2,287% from its lowest level in 2020, making it one of the best-performing FTSE 100 companies. 

Rolls-Royce share price analysis

The daily chart shows that the Rolls-Royce stock price is gaining momentum, raising the possibility that it will jump to 1,000p, as we predicted here. 

The stock has recently crossed the important resistance level at 809p, the highest swing in March this year. 

Moving above that level was important as the stock invalidated the risky double-top pattern, whose neckline was at 557p, the lowest swing in April as global stocks crashed following Trump’s Liberation Day speech in which he announced large tariffs, 

A double-top is one of the most bearish chart patterns in technical analysis as it shows that bulls are afraid of opening trades above that price.

Therefore, moving above the double-top point is a sign that the Vodafone share price has invalidated the bearish outlook.

Read more: Will the Rolls-Royce share price hit 1,000p after its earnings?

The stock remains above all moving averages, and oscillators are highly bullish. For example, while the Average Directional Index (ADX) has dropped lately, it is showing signs of a reversal. 

The Relative Strength Index (RSI) and the MACD indicators continued rising this week, which is a sign that it is gaining momentum. 

Therefore, the most likely scenario is where the Rolls-Royce stock price makes a strong bullish breakout and hits the resistance point at 1000p. This target is established by first measuring the distance between the double-top and the neckline, which is about 30%. 

After this, we measured the same distance from the double-top level, bringing the price target to 1,065p. 

Top catalysts for the Rolls-Royce stock

There are a few key catalysts for the Rolls-Royce share price this year. First, the UK and the US have reached a trade agreement, removing most of the tariffs that the Trump administration put in place. Ending these tariffs would be beneficial since Rolls-Royce has many American clients. 

Second, the European Union and the UK progressed in trade relations this week. The two sides agreed to end most of the red tape that have existed in the past. 

These agreements are important because, while Rolls-Royce is a British company, it makes most of its money from other countries. 

Further, Rolls-Royce business is doing well as demand for planes remains high. For example, Boeing received jet orders worth billions last week during Trump’s trip there. While most of these planes will use General Electric engines, Rolls-Royce will benefit from the sector’s growth.

The most recent results showed that the company’s business is doing well and is on track to hit its guidance. It will make between £2.7 billion and £2.9 billion in operating profit this year and between £2.7 billion and £2.9 billion in cash flow. 

It has achieved these numbers ahead of schedule as all segments of its business remains strong. Its civil aviation business is thriving, while the power segment is seeing higher data center demand.

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