Forex

USD/CAD Flirts with a Weekly Low, Aiming for 1.2800 Ahead of US Data and the FOMC Meeting

Usdcad Price Aims for 1.2800 ahead of us data, 

During the early European session, the USD/CAD pair remained on the defensive and was last seen trading around 1.2820, or the weekly low.

The European Commission President, Ursula von der Leyen, issued the sixth wave of sanctions against Russia on Wednesday, sending crude oil prices up over 3%.

The idea included phasing out Russian crude oil supplies within six months and refined products by the end of the year, which served to alleviate Chinese demand concerns and provided a boost to the black liquid.

As a result, the commodity-linked loonie strengthened, putting pressure on the USD/CAD pair.

The downside, on the other hand, is protected by the underlying optimistic mood surrounding the US dollar, which is boosted by expectations for a more aggressive Fed policy tightening.

Investors appear to believe that the US Federal Reserve will raise interest rates more quickly to combat rising inflation.

This was evidenced by rising US Treasury bond rates, which helped the dollar maintain its position near a multi-year high and provided some support to the USD/CAD pair.

As a result, the market’s attention will be drawn to the outcome of a two-day FOMC monetary policy meeting, which is expected to be released later in the US session.

The Fed is largely expected to raise interest rates by 50 basis points and announce plans to begin decreasing its massive balance sheet, which currently stands at almost $9 trillion.

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Investors will also pay close attention to Fed Chair Jerome Powell’s comments to determine if the US central bank is willing to raise rates even if the economy continues to deteriorate.

The US ADP report on private-sector jobs and the ISM Services PMI will be scrutinized for some push as we approach the big event risk. Apart from that, oil price fluctuations may provide traders with some short-term trading chances in the USD/CAD pair.

Usd/Cad

03/05 Trade of the Week: short USD/CAD

This week, we’ll be looking at the USDCAD exchange rate.

The US dollar is now trading at multi-year highs against a variety of currency pairs, as we all know.

What’s notable about the USDCAD chart is that we’ve increased dramatically in relation to the US dollar vs the Canadian currency, but we paused last week around the March high of $1.29, and we’re expected to do so again this week or next week, given the chart pattern.

Because we failed between $1.29 and $1.2964 in September and December, as well as in March, the strategy is to go short against the trend with a stop-loss level above these highs, with the goal of retracing lower below the lows witnessed last week.

This was set at around $1.2720. As a result, we could cut it short.

I wouldn’t go short right now; instead, I’d wait for the market to move higher, which appears to be the case in the short run ahead of tomorrow’s Federal Open Market Committee (FOMC) meeting.

Short USDCAD at $1.29 with a stop-loss at $1.2970 and a target of $1.2720 is this week’s Trade of the Week.

Every piece of information provided by heartxfx is accurate.

Heartzfx, a trading name of heartzfx Trading Firm, compiled this information. In addition to the disclaimer below, the information on this page does not constitute a record of our trading prices, nor does it constitute an offer or solicitation of a financial instrument transaction.

Heartzfx disclaims any and all liability for any use of these remarks, as well as any consequences that may arise. This information is provided without any representation or warranty as to its accuracy or completeness. News Source:  Ig

Heartzfx Team. 

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