USD/CAD Trading Signal Update – What Could Drive a Downtrend?
The Canadian currency was relatively unchanged versus the United States dollar on Monday and continues to trade near $1.3837. However, USD/CAD stayed at its worst level in more than two years as investor confidence remained fragile amid stronger economic events from the US economy.
The market has taken a beating this year on concerns that central banks’ aggressive tightening could push several big economies into recession. Since Canada is a significant exporter of oil and other commodities, its currency, the loonie, is very susceptible to changes in international economic conditions. Canada’s central bank, the Bank of Canada, is among several that have rapidly increased interest rates in response to inflation.
BoC Governor Tiff Macklem stated on Sunday that the “exceptionally high number” of job openings indicates that the economy can be slowed down without resulting in large-scale unemployment. As the Canadian bond market reopened on Monday after the Thanksgiving Day holiday, rates were higher across a steeper yield curve.
USD/CAD Technical Outlook
The USD/CAD pair rallied yesterday to surpass the target of 1.3900 and reach 1.3975. Still, it quickly reversed to press on the bullish channel’s support line, which appears on the chart and hints at the start of a bearish corrective wave. The USD/CAD is heading lower with targets beginning with a break of 1.3680 to confirm a move towards 1.3500 as the next negative station. As a result, a bearish bias is recommended for today.
The USD/CAD price forecast suggests that consolidating the 1.3680 level against the negative current pressure will halt the projected negative scenario and bring the price back to the main bullish track.
Today’s trading range is predicted to be between 1.3640 support and 1.3780 resistance. Today’s projected trend is bearish.
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