USDCAD H4 Review & long term view
Hey folks, here is our view on USDCAD, please let us know your thoughts on it, happy Friday!
Fundamental Analysis and the big picture
It is important to keep in mind that the US central bank raised interest rates by 25 basis points on Wednesday, as was widely expected, but it sounded cautious about the future given the recent banking sector turmoil. This follows the sudden collapse of two mid-size US banks, Signature Bank and Silicon Valley Bank. Additionally, the Fed lowered its median forecast for real GDP growth projections for 2023 and 2024, keeping the USD and US Treasury bond yields low.
Aside from this, the safe-haven buck is weighed down by a generally upbeat atmosphere in the equity markets. However, the upside for oil prices should be limited by growing market concerns that a slowdown in economic growth will reduce fuel demand. The USD/CAD pair should be supported by this, as well as expectations that the Bank of Canada (BoC) will not raise interest rates any further and the release on Tuesday of Canadian consumer inflation data that was lower than anticipated.
Technical Analysis
The USD/CAD pair fluctuates in a narrow trading band through the early European session on Friday, failing to capitalise on the positive rebound from the 1.3600 area, or over a two-week low. The pair is currently just above the 1.3700 level, but a number of factors prevent any significant upside.
Looking at this week (highlighted zone), from a technical point of view, the two-way cost moves inside a natural reach saw starting from the start of the current week highlight uncertainty among merchants over a shorter period of time direction. Additionally, before placing risky directional wagers on the USD/CAD pair, it is prudent to exercise caution in light of the aforementioned mixed fundamental backdrop. Prior to important macro data from the United States and Canada, which is due later in the early North American session, investors appear also reluctant.
The Durable Goods Orders and flash PMI reports on today's US economic docket will have an impact on USD demand, as well as bond yields and general risk sentiment. Merchants will additionally follow Canadian month to month Retail Marketing projections. Aside from this, the dynamics of the oil price should give the USD/CAD pair produce short-term opportunities later on Today, Friday 24 march 2023, during NY session?
Fundamental Analysis and the big picture
It is important to keep in mind that the US central bank raised interest rates by 25 basis points on Wednesday, as was widely expected, but it sounded cautious about the future given the recent banking sector turmoil. This follows the sudden collapse of two mid-size US banks, Signature Bank and Silicon Valley Bank. Additionally, the Fed lowered its median forecast for real GDP growth projections for 2023 and 2024, keeping the USD and US Treasury bond yields low.
Aside from this, the safe-haven buck is weighed down by a generally upbeat atmosphere in the equity markets. However, the upside for oil prices should be limited by growing market concerns that a slowdown in economic growth will reduce fuel demand. The USD/CAD pair should be supported by this, as well as expectations that the Bank of Canada (BoC) will not raise interest rates any further and the release on Tuesday of Canadian consumer inflation data that was lower than anticipated.
Technical Analysis
The USD/CAD pair fluctuates in a narrow trading band through the early European session on Friday, failing to capitalise on the positive rebound from the 1.3600 area, or over a two-week low. The pair is currently just above the 1.3700 level, but a number of factors prevent any significant upside.
Looking at this week (highlighted zone), from a technical point of view, the two-way cost moves inside a natural reach saw starting from the start of the current week highlight uncertainty among merchants over a shorter period of time direction. Additionally, before placing risky directional wagers on the USD/CAD pair, it is prudent to exercise caution in light of the aforementioned mixed fundamental backdrop. Prior to important macro data from the United States and Canada, which is due later in the early North American session, investors appear also reluctant.
The Durable Goods Orders and flash PMI reports on today's US economic docket will have an impact on USD demand, as well as bond yields and general risk sentiment. Merchants will additionally follow Canadian month to month Retail Marketing projections. Aside from this, the dynamics of the oil price should give the USD/CAD pair produce short-term opportunities later on Today, Friday 24 march 2023, during NY session?
Comment:
It seems like price is moving as per initial idea we posted last Friday week, we are coming to key level ($1.35) from which we would expect a pullback before further downside, that pullback should be s good opportunity to take a short as long we see all relevant market signals for it.
In regards to long-tern view, looking at the Daily chart (right hand side), we believe that price could go back down to the $1.31 key level as a large corrective wave / accumulation (since oct 2022) before going bullish again.
Now in regards to that short trade we mentioned above, if it was to take place, we would most likely aim to the $1.33 price level as TP1, take partial there, then move BE and let it run to the next price level of $1.31, anyway, let’s first what market is going to do in next few hours, and by end of this week.
In regards to long-tern view, looking at the Daily chart (right hand side), we believe that price could go back down to the $1.31 key level as a large corrective wave / accumulation (since oct 2022) before going bullish again.
Now in regards to that short trade we mentioned above, if it was to take place, we would most likely aim to the $1.33 price level as TP1, take partial there, then move BE and let it run to the next price level of $1.31, anyway, let’s first what market is going to do in next few hours, and by end of this week.
Comment:
As per our update from last Friday, looking at the 1D TF, price has broken through that TL @1.3442, now we would expect the market to pullback on TL and Key structure, this pullback could go back up beyond the TL and then continue dropping, as usual we will be watching for trade opportunity.
our view is still bearish, but there is a chance that market may decide to go up once more as per newly formed EQHs, and then dropped from there!