Usd Cad Technical Outlook
USD/CAD remains above the 100-period Exponential Moving Average near 1.4226, suggesting a prevailing bullish trend. The Relative Strength Index oscillates within a neutral range.
Future movements hinge on breaking above 1.4470 or dropping below 1.4151. A rise past 1.4470 could test the psychological level of 1.4500, whereas a drop could expose further lows at 1.4094 and 1.4020.
Key factors influencing the CAD include interest rates determined by the Bank of Canada, oil prices, and broader economic health indicators. Higher oil prices generally support the CAD, while inflation data can lead to adjustments in interest rates that impact currency demand. Strong economic indicators attract investment, solidifying the CAD’s value.
Impact Of Economic Data On Cad
The three-day descent of USD/CAD signals a distinct shift in market sentiment, largely driven by renewed optimism for the Canadian Dollar following stronger-than-expected inflation data. With CPI figures surpassing forecasts, traders have had to recalibrate their expectations for monetary policy, with the Bank of Canada now less likely to cut rates in the immediate future. The prospect of a more restrictive stance has bolstered demand for CAD, pushing it higher across multiple currency pairs, including against the Pound.
While the Canadian Dollar benefits from these developments, the looming potential for fresh tariffs from the United States in early April presents a source of strain. Should the White House announce measures aimed at Canadian goods, we anticipate increased volatility, particularly in commodity-driven assets. Given the strong correlation between trade policies and investor sentiment, such actions may influence CAD positioning in the lead-up to their implementation.
