USD/CAD Price Analysis: Discovers temporary support near 1.3450


  • USD/CAD attempts recovery from 1.3450 while the broader market mood remains quiet.
  • Fed policymakers need more evidence to gain confidence about inflation declining towards 2%.
  • Canadian jobless rate is seen as higher due to the restrictive monetary policy stance of the Bank of Canada.

The USD/CAD pair finds interim support near 1.3450 in the European session on Thursday after witnessing a sell-off in the last two trading sessions. The broader action in the Loonie asset is still lackluster as the United States economic calendar is light this week.

The US Dollar Index (DXY) oscillates in a tight range near 104.00 as investors have digested that the Federal Reserve (Fed) will not begin reducing interest rates until it gets confident that inflation will come down sustainably to the 2% target.

Boston Federal Reserve Bank President Susan Collins said on Wednesday that the central bank would be able to lower interest rates at some point later this year if economic data evolves consistently with their goals. Collins didn’t provide any significant timeline for rate cuts, citing she needs confidence that inflation will return to the 2% target.

Meanwhile, investors await Canada’s Employment data for further action. According to the estimates, Canadian employers hired 15K workers in January. The Unemployment Rate is expected to rise to 5.9% vs. 5.8% in December.

USD/CAD trades in an Ascending Triangle chart pattern formed on a four-hour timeframe, representing a volatility contraction but with a positive bias. The upward-sloping trendline of the aforementioned pattern is placed from December 29 low at 1.3178, while the horizontal resistance is plotted from January 17 high at 1.3542.

The Loonie asset finds a temporary cushion near the 50-period Exponential Moving Average (EMA), which trades around 1.3466.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, which indicates that investors await a fresh economic trigger.

The fresh upside would emerge if the Loonie asset climbed above the January 17 high at 1.3542, which will drive the asset towards the round-level resistance of 1.3600, followed by the November 30 high at 1.3627.

On the flip side, a sell-off could appear if the Loonie asset drops below January 31 low at 1.3359. This will expose the asset to January 4 low at 1.3318 and January 5 low at 1.3288.

USD/CAD four-hour chart

USD/CAD

Overview
Today last price 1.3465
Today Daily Change 0.0002
Today Daily Change % 0.01
Today daily open 1.3463
 
Trends
Daily SMA20 1.3458
Daily SMA50 1.3423
Daily SMA100 1.3553
Daily SMA200 1.3476
 
Levels
Previous Daily High 1.3494
Previous Daily Low 1.3455
Previous Weekly High 1.3476
Previous Weekly Low 1.3359
Previous Monthly High 1.3542
Previous Monthly Low 1.3229
Daily Fibonacci 38.2% 1.347
Daily Fibonacci 61.8% 1.3479
Daily Pivot Point S1 1.3447
Daily Pivot Point S2 1.3432
Daily Pivot Point S3 1.3408
Daily Pivot Point R1 1.3487
Daily Pivot Point R2 1.351
Daily Pivot Point R3 1.3526

 

 

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