• The Loonie extends its weekly gains, so far up 0.78% vs. the US dollar.
  • The Russia – Ukraine conflict is still stuck in negotiations, while the US and EU agreed on Natural gas supply.
  • Goldman Sachs and Citigroup expect two 50-bps increases by the Fed.
  • USD/CAD Price Forecast: Positive divergence between RSI and price action in the 1-hour chart suggests an upward move is on the cards.

The USD/CAD extends its losses in the week, however it appears to face strong support around the 1.2500 mark, amid a mixed market mood, “hawkish” Fed policymakers,  and two North-American-based banks, expecting two consecutive 50 bps increases by the US central bank in the May and June meetings. At the time of writing, the USD/CAD is trading at 1.2509.

The market sentiment remains fragile, though mixed as portrayed by US equities fluctuating, while European bourses stay in the green. The greenback is trading softer, as reflected by the US Dollar Index down 0.13%, at 98.660, while US Treasury yields keep portrays Fed’s hawkishness, with the 10-year T-note yield up eleven basis points, sitting at 2.453%.

The Russia – Ukraine war issues keep influencing the market mood, though on a lower note. The Russian negotiator said that Ukraine and Russia have agreed on secondary matters, but about primary issues, discussions languished. Meanwhile, the US and Europe reached an LNG (Liquified Natural Gas) agreement to cut the Eurozone dependence on Russia.

Oil prices eased from daily highs towards $110.25 on the headline, putting a lid on the Canadian dollar rise vs. the US Dollar.

Goldman Sachs and Citigroup amongst market players expecting 50 bps increases

Elsewhere, Goldman Sachs and Citigroup are the two mentioned banks in the first paragraph, which expect at least two 50-bps increases in the May and June meetings. Furthermore, in a note to clients, Citigroup said that they expect four 50-bps increases to the Federal Funds Rate in 2022.

The economic docket for Canada has the Budget Balance for January, and the Bank of Canada Governor Kozicki would cross wires. On the US front, Fed speaking continues with the New York Fed President John Williams also backing up a 50 bps increase, and he stated, “If it is appropriate to raise by 50 basis points at a meeting, I will do that.”

Also, Pending Home Sales for February shrank 4.1% from a 1% m/m increase expected. Furthermore, the University of Michigan Consumer Sentiment Final for March came at 59.4 from 59.7, while inflation expectations stayed at 5.4% vs. 4.9% on the previous report.

USD/CAD Price Forecast: Technical outlook

The USD/CAD fall extends in the week, though as appreciated by the 1-hour chart, the USD/CAD seems to have reached solid support at the 1.2500 area. Additionally, the Relative Strength Index (RSI), a momentum indicator, is at 38.31, though at a bearish area, shows a positive divergence with USD/CAD price action, suggesting that a move upwards might be on the cards.

If that scenario plays out, the USD/CAD first resistance would be the 50-hour simple moving average (SMA) at 1.2547. Breach of the latter would expose a six-month-old upslope trendline around 1.2570, followed by March 24 daily high at 1.2586 and March 23 daily high at 1.2605.

USD/CAD

Overview
Today last price 1.2509
Today Daily Change -0.0017
Today Daily Change % -0.14
Today daily open 1.2526
 
Trends
Daily SMA20 1.2697
Daily SMA50 1.2686
Daily SMA100 1.2693
Daily SMA200 1.2614
 
Levels
Previous Daily High 1.2586
Previous Daily Low 1.251
Previous Weekly High 1.2871
Previous Weekly Low 1.2589
Previous Monthly High 1.2878
Previous Monthly Low 1.2636
Daily Fibonacci 38.2% 1.2539
Daily Fibonacci 61.8% 1.2557
Daily Pivot Point S1 1.2495
Daily Pivot Point S2 1.2465
Daily Pivot Point S3 1.2419
Daily Pivot Point R1 1.2571
Daily Pivot Point R2 1.2617
Daily Pivot Point R3 1.2648

 

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD recovers toward 1.0500 after mixed US PMI data

EUR/USD recovers toward 1.0500 after mixed US PMI data

EUR/USD rebounds toward 1.0500 in the American session on Friday after the data from the US showed that the business activity in the private sector expanded at a softer pace than anticipated in early February. The pair remains on track to end the week with little changed.

EUR/USD News
GBP/USD rises above 1.2650, looks to post weekly gains

GBP/USD rises above 1.2650, looks to post weekly gains

GBP/USD regains its traction and trades above 1.2650 in the second half of the day on Friday. The data from the US showed that the S&P Global Services PMI dropped into the contraction territory below 50 in February, causing the US Dollar to lose strength and helping the pair edge higher.

GBP/USD News
Gold holds above $2,930 as US yields edge lower

Gold holds above $2,930 as US yields edge lower

Gold holds above $2,930 after correcting from the record-high it set above $2,950 on Thursday. Following the mixed PMI data from the US, the benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and allows XAU/USD to hold its ground.

Gold News
Crypto exchange Bybit hacked for $1.4 billion worth of ETH

Crypto exchange Bybit hacked for $1.4 billion worth of ETH

Following a security breach first spotted by crypto investigator ZachXBT, crypto exchange Bybit announced that it suffered a hack where an attacker compromised one of its ETH wallets.

Read more
Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025