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USD/CAD oscillates inside Wednesday’s range as investors await a speech from Fed Powell.
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Jerome Powell might emphasize keeping interest rates higher for a longer period.
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USD/CAD continues to move higher in a Rising Channel chart pattern.
The USD/CAD pair traded back and forth in a narrow range near the key resistance of 1.3800 in the European session. Looney assets are struggling for direction as investors await a speech from Federal Reserve (Fed) Chair Jerome Powell.
Market participants expect Jerome Powell to insist on keeping interest rates higher for longer to increase pressure on consumer inflation. Powell may cite rate cuts as ‘unwarranted’ in the near term as current price pressures will make it difficult to crack the required inflation above 2%.
Meanwhile, the US Dollar Index (DXY) traded near 105.50, deepening bearish fears. Oil prices found intermediate support after a sharp correction while the downside remains favorable as Middle East conflicts are only between Israel and Palestine. It is worth noting that Canada is an oil exporter to the US and higher oil prices affect the Canadian dollar.
USD/CAD tends to move higher in a rising channel chart pattern where every pullback is viewed as a buying opportunity by market participants. The 50-day exponential moving average (EMA) at 1.3660 continues to provide support to the US dollar bulls. Horizontal resistance is plotted at 1.3682 from March 10.
The Relative Strength Index (RSI) (14) is struggling to move into the bullish range of 60.00-80.00. If the RSI (14) can do that, a bullish momentum will be triggered.
Going forward, a decisive break above October 27 high at 1.3880 would expose the round-level resistance at 1.3900, followed by 13 October 2022 high at 1.3978.
In an alternate scenario, a breakdown below October 24 low around 1.3660 would drag the asset to the round-level support of 1.3600. A further breakdown could expose the asset to October 7 low at 1.3570.
USD/CAD daily chart
USD/CAD
