HomeForex UpdatesForex Pair of the Week: USD/CAD

Forex Pair of the Week: USD/CAD

The US launched CPI information final week for March.  The headline print was 8.5% YoY vs 7.9% YoY in February.  With inflation working this sizzling, Fed member after Fed member has been alluding to a 50bps hike when the FOMC meets once more on Could 4th.  Recall from the assembly minutes that many Fed officers stated 1 or extra 50bps hikes could also be warranted.  Fed audio system shall be out in full power once more this week, together with Fed Chairman Powell on Thursday.  Merchants shall be watching to see if the hawkish rhetoric continues this week. As well as, the US will launch housing information, together with the NAHB Housing Market Index, Housing Begins, constructing permits, and Current Dwelling Gross sales.  Additionally, weekly MBA 30-Yr Mortgage Charges shall be launched.  Final week’s studying was 5.13%.  Merchants shall be watching the info this week to see if the rising mortgage charges influenced the general housing market throughout the month of March.  The US can even launch the often uneventful Beige E-book this week.  Nonetheless, April’s studying could also be extra carefully watched as merchants shall be on the lookout for clues to verify that the FOMC will hike 50bps on Could 4th.

Final week, the Financial institution of Canada (BOC) hiked key rates of interest by 50bps to 1%, as anticipated.  It was the most important enhance in over 20 years and the best degree for rates of interest since earlier than the pandemic started in March 2020.  As well as, the central financial institution stated it could cease reinvesting the proceeds of its maturing bond holdings, and subsequently, starting the method of decreasing its stability sheet.  This week Canada releases CPI.  Did the BOC make the suitable name by mountain climbing 50bps?  Merchants shall be watching as the info is launched on Wednesday.  Expectations are for headline CPI to have risen to six.1% YoY vs 5.7% YoY in February.  Core CPI is predicted to have risen to five% YoY vs 4.8% YoY in February.  Canada can even launch Retail Gross sales information for February this week.  Though the info could also be a bit stale, merchants shall be watching to see if rising inflation affected the Canadian client.  Expectations for the headline print are solely 0.2% MoM vs 3.2% MoM in January.  Retail Gross sales Ex-Autos expectations are simply as poor at 0.2% MoM vs 2.5% MoM in January.

USD/CAD has been buying and selling in a spread between 1.2454 and 1.2965 since mid-November 2021. On April 5th, worth shaped a hammer on the every day timeframe, during which worth opened close to 1.2480, made a false breakdown beneath the vary to a low of 1.2402, and bounced to shut close to the open.  The bounce in USD/CAD continued and worth is presently consolidating round a confluence space between 1.2600 and 1.2650, consisting of:

  • A horizontal trendline
  • The 200 Day Shifting Common
  • An upward sloping trendline relationship to June 1st, 2021
  • The 50 Day Shifting Common

If USD/CAD breaks above this space, the primary resistance is on the highs of April 13th at 1.2676, then the 61.8% Fibonacci retracement from the excessive of March 8th to the lows of April 5th, close to 1.2710.  Above there, worth has some room to maneuver, as the subsequent degree of resistance isn’t till the March 8th highs at 1.2901.  First assist is on the low of April 14th of 1.2555, then the underside of the longer-term vary at 1.2453.  Under there, worth can check the lows from April 5th at 1.2402.

Supply: Tradingview, Stone X

With US housing information and Canadian CPI due out this week, USD/CAD may very well be in for some volatility.   As well as, the pair is presently buying and selling in a confluence zone round 1.2600 and 1.2650.  I break to both course might present info as to the subsequent course for USD/CAD!

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