USD/CAD Price Analysis: Trades inside Wednesday’s range ahead of Fed Powell’s speech
|- USD/CAD oscillates inside Wednesday’s range as investors await a speech from Fed Powell.
- Jerome Powell might emphasize keeping interest rates higher for a longer period.
- USD/CAD continues to move higher in a Rising Channel chart pattern.
The USD/CAD pair trades back and forth in a narrow range near the crucial resistance of 1.3800 in the European session. The Loonie asset struggles for a direction as investors await the speech from Federal Reserve (Fed) Chair Jerome Powell.
The market participants hope that Jerome Powell would emphasize keeping interest rates higher for a longer period to keep pressure elevated on consumer inflation. Powell may quote rate cuts ‘unreasonable’ in the near term as current price pressures over 2% required inflation would be a hard nut to crack.
Meanwhile, the US Dollar Index (DXY) trades directionless near 105.50 despite deepening slowdown fears. The oil prices discover intermediate support after a sharp correction while more downside remains favored as Middle East conflicts are seen contained between Israel and Palestine only. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices impact the Canadian Dollar.
USD/CAD continues to move higher in a Rising Channel chart pattern in which each pullback is considered as a buying opportunity by the market participants. The 50-day Exponential Moving Average (EMA) at 1.3660 continues to provide support to the US Dollar bulls. Horizontal resistance is plotted from March 10 high at 1.3682.
The Relative Strength Index (RSI) (14) struggles to shift into the bullish range of 60.00-80.00. If the RSI (14) manages to do so, a bullish momentum would get triggered.
Going forward, a decisive break above October 27 high at 1.3880 would expose the round-level resistance at 1.3900, followed by 13 October 2022 high at 1.3978.
In an alternate scenario, a breakdown below October 24 low around 1.3660 would drag the asset to the round-level support of 1.3600. A further breakdown could expose the asset to October 7 low at 1.3570.
USD/CAD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.