USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD sees marginal decrease, pivot point at 1.3448.
- RSI neutral, MACD hints at bearish momentum, price near 50-day EMA.
- Forecast suggests cautious buy; key levels outlined for traders.
The USD/CAD pair is slightly down by 0.10%, trading at 1.34667. Key price levels to watch are the pivot point at 1.3448, which could serve as a turning point for the currency pair. Immediate resistances loom at 1.3518, 1.3611, and 1.3681, while supports are established at 1.3358, 1.3294, and 1.3195.
The RSI stands neutral at 50, suggesting a balanced market without clear overbought or oversold signals. The MACD's minor divergence, with a current value at -0.00015 below its signal at -0.00007, might indicate a slight bearish momentum. The 50-day EMA at 1.3461 is nearly aligned with the current price, offering neither bullish nor bearish conviction.
The absence of significant chart patterns suggests a market in search of direction. The short-term forecast is cautiously optimistic, proposing a buy above 1.34455, targeting a take-profit at 1.35390, with a stop-loss set at 1.33760.
USD/CAD - Trade Idea
Entry Price – Buy Above 1.34455
Take Profit – 1.35390
Stop Loss – 1.33760
Risk to Reward – 1: 1.35
Profit & Loss Per Standard Lot = +$935/ -$695
Profit & Loss Per Mini Lot = +$93/ -$69
USD/CAD Price Analysis – Jan 23, 2024
Daily Price Outlook
Despite the bullish US dollar, the USD/CAD currency pair failed to halt its downward rally and remained well offered around the 1.3476 level. However, the reason for its downward trend can be attributed to the fact that WTI prices gained ground on concerns over global supply disruptions, which tend to underpin the Canadian dollar and contribute to the USD/CAD pair losses.
In the meantime, the Canadian Dollar (CAD) experienced losses against the US Dollar (USD) in the previous session, which could be attributed to the risk aversion sentiment over the escalated geopolitical situation in the Middle East.
WTI Price Surge and Geopolitical Tensions Impacting USD/CAD Pair
West Texas Intermediate (WTI) prices are on the rise, reaching around $74.70 per barrel for the second consecutive day. This surge is primarily driven by concerns about global energy supplies. Geopolitical tensions have heightened due to a drone strike on Russia's Novatek by Ukraine, and disruptions in US crude oil production caused by extreme cold weather are also contributing to the increase in prices. The upward trend in WTI prices is impacting the Canadian dollar and adding to the losses in the USD/CAD pair.
Therefore, the rise in WTI prices, driven by global energy concerns and geopolitical tensions, is pressuring the USD/CAD pair. This is mainly due to the impact on the Canadian dollar and its correlation with oil prices.
Middle East Tensions and Economic Indicators Impacting USD/CAD Pair
Furthermore, the US Dollar Index (DXY) is holding steady following recent gains. The demand for the US Dollar is influenced by a cautious approach due to heightened tensions in the Middle East. Recent military actions, such as air strikes in Yemen by the US and the UK targeting Iran-led Houthi terrorists, have prompted investors to seek safety in the US Dollar. This support is extending to the USD/CAD pair.
On another note, the US Conference Board reports a slight improvement in the Leading Economic Index for December, shifting from -0.5% in November to -0.1%. Hence, the heightened tensions in the Middle East drive demand for the US Dollar, supporting the USD/CAD pair.
USD/CAD - Technical Analysis
The USD/CAD pair is slightly down by 0.10%, trading at 1.34667. Key price levels to watch are the pivot point at 1.3448, which could serve as a turning point for the currency pair. Immediate resistances loom at 1.3518, 1.3611, and 1.3681, while supports are established at 1.3358, 1.3294, and 1.3195.
The RSI stands neutral at 50, suggesting a balanced market without clear overbought or oversold signals. The MACD's minor divergence, with a current value at -0.00015 below its signal at -0.00007, might indicate a slight bearish momentum. The 50-day EMA at 1.3461 is nearly aligned with the current price, offering neither bullish nor bearish conviction.
The absence of significant chart patterns suggests a market in search of direction. The short-term forecast is cautiously optimistic, proposing a buy above 1.34455, targeting a take-profit at 1.35390, with a stop-loss set at 1.33760.
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USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD rises to 1.34723, showing strength above pivot point 1.3399.
-RSI nears overbought at 68, with MACD suggesting upward momentum.
-Technical analysis supports a bullish strategy with defined entry, profit, and stop loss points.
On January 16th, the USD/CAD pair showed a positive trend, gaining 0.34% to reach 1.34723. The 4-hour chart highlights a key pivot point at 1.3399, with the pair encountering immediate resistance at 1.3456, followed by 1.3500 and 1.3555. On the support front, levels are established at 1.3353, 1.3294, and 1.3248.
The technical indicators for USD/CAD present a bullish outlook. The Relative Strength Index (RSI) is at 68, nearing the overbought territory but still indicative of strong buying interest. The Moving Average Convergence Divergence (MACD) shows a value of 0.001, with the signal line at 0.00216, suggesting a potential upward momentum. The 50-day Exponential Moving Average (EMA) is currently at 1.3431, which the pair has recently surpassed, reinforcing the bullish sentiment.
A notable chart pattern is the breakout from a downward trendline, indicating a shift towards a buying trend. Given these technical insights, the short-term forecast for USD/CAD appears bullish. Traders might consider a buy limit at 1.34430, aiming for a take profit at 1.35133, with a stop loss set at 1.34037. This strategy banks on the expectation that the pair will test and potentially break through the upcoming resistance levels.
USD/CAD - Trade Idea
Entry Price – Buy Limit 1.34430
Take Profit – 1.35133
Stop Loss – 1.34037
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$703/ -$393
Profit & Loss Per Mini Lot = +$70/ -$39
USD/CAD Price Analysis – Jan 16, 2024
Daily Price Outlook
The USD/CAD currency pair sustained its upward trend and remained well bid around the 1.3483 level. The reason for this upward trend could be attributed to the bullish US dollar. The US dollar gained ground after hawkish comments from Atlanta Fed President Raphael Bostic. Besides this, upbeat US Treasury yields were seen as another key factor that boosted the US dollar and contributed to the gains in the USD/CAD pair. Meanwhile, the Bank of Canada's Business Outlook Survey showed further declines in sentiment, undermining the Canadian dollar and contributing to the gains in the USD/CAD pair.
Canada's Sales Recovery and Economic Concerns
It's important to highlight that Canada's Wholesale and Manufacturing Sales data performed better than expected but is still on the road to recovery from recent setbacks. In November, Wholesale Sales reached a three-month high, beating forecasts at 0.9%, bouncing back from the previous month's -0.3%. Similarly, Manufacturing Sales rebounded more than anticipated, hitting a four-month high at 1.2% in November, surpassing the expected 1.0%.
However, the Bank of Canada's Business Outlook Survey for Q4 2023 revealed growing concerns among businesses regarding declining sales and persistent price pressures. Investors are now looking ahead to Tuesday's Canadian Consumer Price Index for potential inflation upticks.
Therefore, the positive Wholesale and Manufacturing Sales data may strengthen the Canadian dollar (CAD) against the US dollar (USD). However, concerns from the Business Outlook Survey could create volatility. Traders await the Canadian Consumer Price Index for further insights.
Market Impact of Martin Luther King Day and Upcoming Canadian CPI Data on USD/CAD Pair
Additionally, US markets are closed on Monday for Martin Luther King Day, leading to reduced trading activity in North America. Canadian traders are anticipating Tuesday's release of December's Consumer Price Index (CPI), expecting a year-on-year increase of 3.3%, up from November's 3.1%. However, the monthly CPI is predicted to decrease by 0.3%. This data could impact the Canadian Dollar (CAD), currently at four-week lows near 1.3400 against the US Dollar (USD).
Alongside CPI, the Bank of Canada will release the Core CPI, excluding volatile elements. In November, Core CPI showed a 0.1% monthly increase and a 2.8% year-on-year rise, influencing CAD direction and shaping expectations for the BoC's policy. Therefore, the news will lead to increased volatility in the USD/CAD pair, with the potential for CAD strength due to positive CPI data.
USD/CAD - Technical Analysis
On January 16th, the USD/CAD pair showed a positive trend, gaining 0.34% to reach 1.34723. The 4-hour chart highlights a key pivot point at 1.3399, with the pair encountering immediate resistance at 1.3456, followed by 1.3500 and 1.3555. On the support front, levels are established at 1.3353, 1.3294, and 1.3248.
The technical indicators for USD/CAD present a bullish outlook. The Relative Strength Index (RSI) is at 68, nearing the overbought territory but still indicative of strong buying interest. The Moving Average Convergence Divergence (MACD) shows a value of 0.001, with the signal line at 0.00216, suggesting a potential upward momentum. The 50-day Exponential Moving Average (EMA) is currently at 1.3431, which the pair has recently surpassed, reinforcing the bullish sentiment.
A notable chart pattern is the breakout from a downward trendline, indicating a shift towards a buying trend. Given these technical insights, the short-term forecast for USD/CAD appears bullish. Traders might consider a buy limit at 1.34430, aiming for a take profit at 1.35133, with a stop loss set at 1.34037. This strategy banks on the expectation that the pair will test and potentially break through the upcoming resistance levels.
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USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD trades slightly higher at 1.3340, hinting at a cautious bullish trend.
- Key resistance at 1.3335 and 1.3430; support at 1.3156 and 1.3089.
- Double top pattern at 1.3395 suggests a watchful approach for further price action.
As of Tuesday, January 9, the USD/CAD pair is exhibiting a slight upward movement, trading at 1.3340, a 0.05% increase from the previous day. This subtle rise reflects a cautiously optimistic market sentiment towards the US Dollar against the Canadian Dollar.
In the current market scenario, the USD/CAD pair navigates through a series of technical levels that define its potential path. The pivot point for the pair is set at 1.3265. Resistance levels are identified at 1.3335, followed by higher ceilings at 1.3430 and 1.3504, which could act as barriers to further upward movements. On the flip side, the pair finds immediate support at 1.3156, with subsequent support levels at 1.3089 and 1.3022, offering potential safety nets in case of a downtrend.
The Relative Strength Index (RSI) for the pair stands at 53, indicating a marginally bullish sentiment, yet not overly so. The Moving Average Convergence Divergence (MACD) records a value of -0.0005 with a signal line at 0.00148, suggesting a mixed outlook with no clear directional momentum. The current trading price is just below the 50-Day Exponential Moving Average (EMA) of 1.3360, indicating a neutral to slightly bearish short-term trend.
The USD/CAD pair shows a double top pattern extending resistance at 1.3395, a critical level that traders are monitoring closely. This pattern typically suggests a potential reversal or a pause in the upward momentum, warranting caution among investors.
Considering the above technical analysis, the overall trend for USD/CAD appears cautiously optimistic but remains neutral. For traders, a prudent strategy might involve initiating a buy position above 1.33432, targeting profits at 1.34481, and placing a stop loss at 1.33067. This approach takes into account the current technical landscape, with an emphasis on the near-term resistance and support levels.
USD/CAD - Trade Idea
Entry Price – Buy Above 1.33432
Take Profit – 1.34481
Stop Loss – 1.33067
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$1049/ -$365
Profit & Loss Per Mini Lot = +$104/ -$36
USD/CAD Price Analysis – Jan 09, 2024
Daily Price Outlook
During the European session on Tuesday, the USD/CAD currency pair sustained its upward rally, reaching near 1.3350. The reason for this upward trend can be attributed to the stability of the US dollar. The dollar remained steady in Asia after a slight dip from recent highs. Investors are cautious about potential rate cuts in 2024, leading to some profit-taking. Despite this, the dollar remains robust, and attention is focused on Thursday's inflation data, which might not support the idea of a quick rate cut by the Fed in March 2024, given recent positive job market data.
Meanwhile, crude oil prices steadied on Tuesday after sliding in the previous session, as markets weighed Middle East tensions against demand worries and rising OPEC supply. This supports the Lonnie and contributes to the USD/CAD currency pair losses.
Fed's Cautious Stance and Potential Impact on USD/CAD Pair
It is worth noting that the dollar index stabilized in Asia after a recent drop, driven by uncertainty about potential interest rate cuts in 2024. Despite the dip, the dollar retained most of its recent gains as investors leaned towards it ahead of Thursday's CPI inflation data. The expected mild inflation increase, combined with strong job data, challenges expectations of a Fed rate cut by March 2024. Atlanta Fed President Bostic and Fed Governor Bowman's cautious stance suggest a less aggressive approach, influencing market sentiment and potentially putting pressure on the US Dollar.
Therefore, the cautious Fed stance may weaken the US Dollar, potentially impacting the USD/CAD pair. Investors favoring the Canadian Dollar (CAD) due to reduced USD confidence could lead to a decline in the USD/CAD pair.
Geopolitical Developments and Economic Data Impact on WTI Oil and USD/CAD Pair
Moreover, West Texas Intermediate (WTI) oil is near $71 per barrel due to concerns about the Israel-Gaza conflict expanding regionally. US Secretary of State Antony Blinken's visit to Tel Aviv for discussions with Arab leaders adds to the geopolitical tension. Meanwhile, in Canada, the upcoming releases of trade balance and building permit data might impact the Canadian Dollar (CAD).
A forecasted decline in trade balance and building permits suggests potential shifts in imports, exports, and construction activities. Oil prices steadied, influenced by Middle East tensions and OPEC supply dynamics. Despite concerns, the market predicts oil trading between $75 and $80 per barrel, barring unforeseen Middle East escalations.
Therefore, the geopolitical tensions and potential economic shifts in Canada may impact the USD/CAD pair. Increased concerns favoring the Canadian Dollar (CAD) due to stable oil prices and potential positive economic data could lead to a decline in the USD/CAD pair.
USD/CAD - Technical Analysis
As of Tuesday, January 9, the USD/CAD pair is exhibiting a slight upward movement, trading at 1.3340, a 0.05% increase from the previous day. This subtle rise reflects a cautiously optimistic market sentiment towards the US Dollar against the Canadian Dollar.
In the current market scenario, the USD/CAD pair navigates through a series of technical levels that define its potential path. The pivot point for the pair is set at 1.3265. Resistance levels are identified at 1.3335, followed by higher ceilings at 1.3430 and 1.3504, which could act as barriers to further upward movements. On the flip side, the pair finds immediate support at 1.3156, with subsequent support levels at 1.3089 and 1.3022, offering potential safety nets in case of a downtrend.
The Relative Strength Index (RSI) for the pair stands at 53, indicating a marginally bullish sentiment, yet not overly so. The Moving Average Convergence Divergence (MACD) records a value of -0.0005 with a signal line at 0.00148, suggesting a mixed outlook with no clear directional momentum. The current trading price is just below the 50-Day Exponential Moving Average (EMA) of 1.3360, indicating a neutral to slightly bearish short-term trend.
The USD/CAD pair shows a double top pattern extending resistance at 1.3395, a critical level that traders are monitoring closely. This pattern typically suggests a potential reversal or a pause in the upward momentum, warranting caution among investors.
Considering the above technical analysis, the overall trend for USD/CAD appears cautiously optimistic but remains neutral. For traders, a prudent strategy might involve initiating a buy position above 1.33432, targeting profits at 1.34481, and placing a stop loss at 1.33067. This approach takes into account the current technical landscape, with an emphasis on the near-term resistance and support levels.
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USD/CAD Price Analysis – Jan 02, 2024
Daily Price Outlook
During the early hours of the European session, the USD/CAD currency pair managed to halt its downward rally and gained traction around the 1.3250 level. The upward trend can be attributed to the recovery in US Treasury bond yields, assisting the US Dollar (USD) in attracting buyers for the third consecutive day. This, in turn, is viewed as a key factor providing support to the USD/CAD pair.
Meanwhile, the upticks in crude oil prices were seen as one of the key factor that underpinned the commodity-linked Loonie and cap further upside in the USD/CAD pair. Furthermore, the dovish expectations regarding the Federal Reserve (Fed) may prevent aggressive bets from USD bulls and could potentially cap the major currency pair.
Anticipated Interest Rate Cut and Economic Outlook: Impact of US Core PCE Price Index Drop
It's worth noting that investors are strongly leaning towards the idea that the US central bank might cut interest rates by March. This belief is backed by a larger-than-expected drop in the US Core Personal Consumption Expenditure (PCE) Price Index, which is the Federal Reserve's preferred measure of inflation.
Despite the robust performance of the US economy, the current situation paves the way for a gradual economic slowdown in 2024, providing the central bank with flexibility to adjust its policies earlier. The increase in US bond yields is also strengthening the US dollar, playing a role in the gains observed in the USD/CAD pair.
Canadian Dollar Dynamics: Oil Price Influence, Interest Rate Speculations, and Global Economic Factors
Moreover, the Canadian Dollar gets a boost as oil prices rise. In the meantime, the head of Canada's central bank, Tiff Macklem, hinted that they might lower interest rates in 2024. This means the Canadian Dollar relies on both oil prices and people's sentiments towards the US dollar. However, the Canadian Dollar is affected by oil and the US dollar, but it's important to be careful due to economic uncertainty.
Therefore, the potential lowering of interest rates in 2024, coupled with economic uncertainty, creates caution in assuming a continued rise of the USD/CAD pair from its recent low, emphasizing the impact of global economic factors.
USD/CAD - Technical Analysis
The USD/CAD pair showed a marginal increase on Tuesday, trading at 1.32566, up by a mere 0.03%. The currency pair is navigating around a pivot point of 1.3199. Key resistance levels are identified at 1.3232, 1.3288, and 1.3322, while supports are found at 1.3143, 1.3107, and 1.3073, offering a clear framework for potential price movements.
The Relative Strength Index (RSI) is positioned at 53, suggesting a slightly bullish sentiment. The Moving Average Convergence Divergence (MACD) is marginally positive at 0.001, indicating a potential for upward momentum. The pair is currently trading just below the 50-Day Exponential Moving Average (EMA) of 1.3238, a factor that may influence its short-term trajectory.
Considering the technical analysis, the overall trend for USD/CAD appears to be cautiously bullish. A strategic approach could involve a sell limit at 1.33732, with a take profit target at 1.31427 and a stop loss at 1.35216, while keeping an eye on the mentioned technical levels for future direction.
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USD/CAD Price Analysis – Dec 26, 2023
Daily Price Outlook
Despite the bearish US dollar and higher crude oil prices, the USD/CAD currency pair prolonged its upward trend and remained well bid around above 1.3260 due to the ongoing signs of economic slowdown in Canadian economy. It is worth noting that the Canadian Dollar is facing challenges in attracting buyers due to ongoing signs of an economic slowdown. The latest economic data reveals that the monthly Gross Domestic Product (GDP) of Canada has shown no growth for the fourth consecutive reporting period, remaining flat at 0.0% in October. This follows a downward revision of September's GDP from 0.1% to flat.
Impact of Weaker-than-Expected US Inflation on Fed Rate Hike Expectations
Apart from this, the recent data on US spending suggests that inflation is not as high as expected. This has led people to think that the Federal Reserve might lower interest rates more often and by a larger amount in 2024. The key inflation measure, called the Core PCE Price Index, was 3.2% for the year through November, a bit lower than the predicted 3.3% and down from October.
Investors are now betting that the Federal Reserve will make bigger interest rate cuts next year than the Fed itself has predicted. Money markets indicate potential cuts of over 160 basis points through 2024, compared to the Fed's forecast of 75 basis points by the end of next December.
Therefore, the softer-than-expected US inflation may weaken the USD against the CAD, as it fuels expectations of more frequent Fed rate hikes in 2024.
Geopolitical Tensions and Fed Rate Cut Expectations Drive WTI Crude Oil Prices
WTI Crude oil prices edged up on Tuesday due to heightened geopolitical tensions in the Middle East and optimism about potential interest rate cuts by the U.S. Federal Reserve. Investors are optimistic that rate cuts will spur global economic growth and increase demand for oil. The recent rebound in oil prices is also attributed to concerns about conflict in the Red Sea.
However, the announcement of the resumption of shipping routes by Maersk has eased some supply worries. Furthermore, the expectations of Fed interest rate cuts in response to lower-than-targeted inflation have further supported oil prices, creating a positive outlook for the market.
Therefore, the higher crude oil prices tend to boost the Canadian dollar and may limit some of the gains of the USD/CAD pair.
USD/CAD - Technical Analysis
In the fluctuating world of forex trading, the USD/CAD pair presents a nuanced picture as it navigates through various economic pressures and market sentiments. As of December 26, the pair is trading at 1.32527, marking a slight decrease of 0.12%. This movement reflects the ongoing tug-of-war between the US and Canadian economies and their respective monetary policies.
The pair's pivot point is set at 1.3111, acting as a critical marker in its price movement. The immediate resistance is found at 1.3189, with further resistance levels at 1.3296 and 1.3378. These points represent potential barriers that the pair might face in its upward journey.
On the downside, the immediate support level lies at 1.2996, followed by subsequent supports at 1.2889 and 1.2778. These levels are essential in determining the pair's stability and potential rebound during a downturn.
The Relative Strength Index (RSI) for USD/CAD is currently at 28, indicating that the pair might be in oversold territory. This suggests a potential rebound or stabilization in the near future.
The Moving Average Convergence Divergence (MACD) stands at -0.00021, just below its signal of -0.00364, hinting at a bearish sentiment in the short term.
Furthermore, the pair's current price is below its 50-Day Exponential Moving Average (EMA) of 1.3274, confirming the bearish trend.
The USD/CAD pair shows a breakout from the upward channel, suggesting a shift in momentum that could lead to a buying trend if sustained.
The overall trend for USD/CAD is currently bearish, below the 1.32900 mark. However, there is potential for change if the pair tests and breaks through the resistance levels in the coming days.
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USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/CAD trades at 1.32527, down by 0.12%, with a pivot point at 1.3111 and resistance levels at 1.3189, 1.3296, and 1.3378.
- Technical indicators show an oversold condition with RSI at 28 and MACD at -0.00021, suggesting a bearish sentiment in the short term.
- The currency pair is below the 50 EMA, with a current bearish trend, but potential exists for a reversal if key resistances are tested and surpassed.
In the fluctuating world of forex trading, the USD/CAD pair presents a nuanced picture as it navigates through various economic pressures and market sentiments. As of December 26, the pair is trading at 1.32527, marking a slight decrease of 0.12%. This movement reflects the ongoing tug-of-war between the US and Canadian economies and their respective monetary policies.
The pair's pivot point is set at 1.3111, acting as a critical marker in its price movement. The immediate resistance is found at 1.3189, with further resistance levels at 1.3296 and 1.3378. These points represent potential barriers that the pair might face in its upward journey.
On the downside, the immediate support level lies at 1.2996, followed by subsequent supports at 1.2889 and 1.2778. These levels are essential in determining the pair's stability and potential rebound during a downturn.
The Relative Strength Index (RSI) for USD/CAD is currently at 28, indicating that the pair might be in oversold territory. This suggests a potential rebound or stabilization in the near future.
The Moving Average Convergence Divergence (MACD) stands at -0.00021, just below its signal of -0.00364, hinting at a bearish sentiment in the short term.
Furthermore, the pair's current price is below its 50-Day Exponential Moving Average (EMA) of 1.3274, confirming the bearish trend.
The USD/CAD pair shows a breakout from the upward channel, suggesting a shift in momentum that could lead to a buying trend if sustained.
The overall trend for USD/CAD is currently bearish, below the 1.32900 mark. However, there is potential for change if the pair tests and breaks through the resistance levels in the coming days.
USD/CAD - Trade Idea
Entry Price – Sell Below 1.3290
Take Profit – 1.31037
Stop Loss – 1.34137
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$186/ -$123
Profit & Loss Per Mini Lot = +$18/ -$12
USD/CAD Price Analysis – Dec 19, 2023
Daily Price Outlook
Despite the dovish remarks by the Bank of Canada (BoC) Governor Tiff Macklem and the modest US Dollar (USD) uptick, the USD/CAD currency pair failed to stop its losing streak and remained well offered around below the 1.3390 level. However, the reason for its downward trend could be attributed to the recent goodish recovery in Crude Oil prices, which tends to underpin the commodity-linked Loonie and contributes to the USD/CAD currency pair.
Bank of Canada's Rate Cut Hints and Market Impact
It's worth noting that the Bank of Canada's Governor, Tiff Macklem, recently hinted at the possibility of lowering interest rates in 2024. This news has softened the potential downsides in the USD/CAD pair. People in the market quickly reacted, expecting rate cuts to begin around April, with a total cut of at least 1% by the end of next year. This, in turn, is likely to support the USD/CAD pair. Although, the upticks were short-lived and temporary amid the recent recovery in Crude Oil prices, which usually benefits the Canadian Dollar linked to commodities.
US Dollar Outlook and Fed Presidents' Views on Rate Cuts
Furthermore, Chicago Federal Reserve (Fed) President Austan Goolsbee and Cleveland Fed President Loretta Mester recently disagreed with the market's predictions of early interest rate cuts. This follows New York Fed President John Williams's statement on Friday that it's too early to talk about rate cuts. Moreover, the geopolitical risks are boosting the USD's safe-haven status against the Canadian Dollar. Traders are cautious about making big bets on the USD/CAD pair and are waiting for the latest consumer inflation figures from Canada for clearer direction later in the North American session.
Thus, the mixed views from Fed officials on early rate cuts and geopolitical risks favoring the USD's safe-haven status against the Canadian Dollar are making USD/CAD traders cautious. They're awaiting Canada's consumer inflation figures for clearer direction.
USD/CAD - Technical Analysis
The USD/CAD pair on December 19th exhibits a subtle yet complex trading pattern in the forex market. Currently, it records a marginal decline of 0.05%, trading at 1.3393. This level of trading activity indicates a cautious market sentiment towards the currency pair.
Analyzing the 4-hour chart, the pivot point is established at 1.3180. The pair faces immediate resistance at 1.3277, with further resistance expected at 1.3450 and 1.3550. On the other hand, support levels are found at 1.3012, followed by 1.2847 and 1.2670. These key price levels will be critical in dictating the near-term trajectory of the USD/CAD pair.
The technical indicators provide a nuanced view of the pair's potential direction. The Relative Strength Index (RSI) stands at 38, suggesting a bearish sentiment as it falls below the neutral 50 threshold. However, the Moving Average Convergence Divergence (MACD) presents a value of 0.00062 against a signal line of -0.00373, hinting at possible upward momentum. This contrast in indicators underscores the current market uncertainty.
The 50-Day Exponential Moving Average (EMA) at 1.3391 closely aligns with the current trading price, indicating a balanced market outlook. Notably, the Loonie has entered an oversold zone, and the closing of candles over the $1.3350 level could pivot the pair towards a bullish bias today.
In conclusion, the overall trend for the USD/CAD pair appears to be bullish above the 1.3390 level. The short-term forecast suggests that the pair may test higher resistance levels in the upcoming sessions, particularly if it sustains above the critical EMA and support points. Investors and traders should closely monitor these technical indicators and key levels for insights into potential market shifts.