Loonie Features Proceed Put up US CPI

USD/CAD PRICE, CHARTS AND ANALYSIS:

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MOST READ: US Dollar (DXY) Technical Forecast: DXY on the Mercy of US Data with Inflation Ahead Next Week

USD/CAD FUNDAMENTAL OUTLOOK

USD/CAD has continued its slide at this time to check the top quality breakout which lastly occurred final week. Falling WTI Oil costs nevertheless could hinder the loonie because it seems to be to submit additional features in opposition to the dollar. Further upside nonetheless looks as if the trail of least resistance at current; nevertheless, this week’s uncertainty and warning continues to weigh on the US Dollar.

The total elementary image nonetheless favors the bulls transferring ahead because the regardless of latest developments I nonetheless suppose the Fed are prone to hike charges at its assembly subsequent week. The query is whether or not it will likely be 25bps or whether or not the Fed is not going to increase charges in any respect, with market expectations now all however ruling out the chance of a 50bps hike. Today we additionally heard from Moody’s who said that their base case is for the US Fed’s financial tightening to proceed, which may deepen some US banks’ challenges.

Source: CME FedWatch Tool

The Bank of Canada (BoC) in the meantime has confirmed their perception that the present financial coverage stance is restrictive sufficient to tame inflation. BoC Governor Macklem did nevertheless depart the door open to additional price hikes ought to inflation rise as soon as extra. Recent will increase in employment numbers and the next employment price index have reignited fears that inflation could tick increased as soon as extra. At the second nevertheless this has not come to fruition with Canadian inflation information due subsequent week Tuesday, which ought to clear issues up for the BoC transferring ahead.

On the information entrance we nonetheless have fairly a bit of knowledge out of the US for the remainder of the week with Retail Sales and PPI out tomorrow. The primary information level that would have a big affect on USDCAD nevertheless is the Canadian inflation print due subsequent week Tuesday.

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TECHNICAL OUTLOOK

From a technical perspective, USD/CAD is presently retesting the vary we broke out of final week which had been in play since November 2022. Yesterday’s every day candle shut did full a night star candlestick sample and we have now had observe by means of at this time. The pair has discovered help on the 1.3650 deal with bouncing 50-pips to commerce at across the 1.3700 mark (on the time of writing).

USDCAD stays bullish except we have now a every day candle shut under the 1.3580 degree (blue horizontal line). I do anticipate the pair to search out help round right here earlier than persevering with its subsequent leg increased with the 1.3900 or 1.3980 (2022 excessive) coming into focus.

USD/CAD Daily Chart, March 14, 2023