USDCAD Technical Analysis – Key levels in play

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USD

  • The Fed left interest rates unchanged as
    expected at the last meeting with basically no change to the statement. The Dot
    Plot still showed three rate cuts for 2024 and the economic projections were
    upgraded with growth and inflation higher and the unemployment rate lower.
  • Fed Chair Powell
    maintained a neutral stance as he said that it was premature to react to the
    recent inflation data given possible bumps on the way to their 2% target.
  • The US CPI and
    the US PPI beat
    expectations for the second consecutive month.
  • The US Jobless Claims beat
    expectations.
  • The latest US Manufacturing
    PMI
    beat expectations while the Services PMI missed slightly. Both the measures
    remain in expansion though.
  • The US Consumer
    Confidence missed expectations although the labour
    market details improved.
  • The market expects the first rate cut in June.

CAD

  • The BoC left interest rates unchanged at
    5.00% as expected at the last meeting stating that further easing in underlying
    inflation is needed.
  • The latest Canadian CPI missed expectations across the
    board with the underlying inflation measures falling.
  • On the labour market side, the latest report beat
    expectations but we saw a fall in wage growth which is something that the BoC
    is watching closely.
  • The Canadian PMIs improved in February
    although they remain both in contractionary territory.
  • The market expects the first rate
    cut in June.

USDCAD Technical Analysis –
Daily Timeframe

USDCAD Daily

On the daily chart, we can see that USDCAD got
rejected once again from the key 1.3620 resistance. We can
notice that the pair is trading inside a rising channel and the target for the
sellers should be the lower bound of the channel. The buyers, on the other
hand, will have a much better risk to reward setup around the bottom trendline to
position for a rally into the 1.38 handle.

USDCAD Technical Analysis –
4 hour Timeframe

USDCAD 4 hour

On the 4 hour chart, we can see that the price
pulled back from the selloff into the blue 8 moving average where we
can also find the 38.2% Fibonacci retracement level
for confluence. This is
where we can expect the sellers to step in with a defined risk above the
Fibonacci level to position for a drop into the lower bound of the channel. The
buyers, on the other hand, will want to see the price breaking higher to
position for a rally into the 1.3620 resistance targeting a break above it.

USDCAD Technical Analysis –
1 hour Timeframe

USDCAD 1 hour

On the 1 hour chart, we can see more
closely the bearish setup with the minor resistance zone around the 1.3560
level. If the price were to break further below the black counter-trendline, we
can expect the sellers to increase the bearish bets into the lower bound of the
channel.

Upcoming Events

Today we conclude the week with the US PCE and Fed
Chair Powell.

Source

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