- USD/CAD trims some losses from Wednesday, although it struggles to recapture the 50 DMA, which could push it another leg lower.
- Negative market sentiment is keeping safe haven pairs afloat.
- USD/CAD Technical Outlook: Neutral bias but could turn neutral-bearish if USD/CAD bulls struggle at 1.2680, the 50 DMA.
Stuck between the 50 and 100-day moving averages (DMAs) after a steeper loss on Wednesday, while the Bank of Canada (BoC) hiked its bank rate 25 basis points to 0.50%, the USD/CAD rise modestly. At time of writing, USD/CAD is trading at 1.2661, 40 pips below 1.2700.
Geopolitical headlines hit financial markets again. While Russia-Ukraine was holding the second round of talks in Belarus, the Ukrainian military reported that Belarusian troops were ordered to cross the border into Ukraine. He said the market mood was still damp as seen in global stocks. The CAD weakened against its safe haven peers amid rising US crude prices clinging to $110.
USD/CAD Price Forecast: Technical Outlook
USD/CAD bias is neutral but could be “neutral-bearish”. Why? Because March 2 recorded a daily close below the February 10 low at 1.2632, breaking the previous market structure; however, on Thursday, USD/CAD rallied but is struggling to break above the 50-DMA at 1.2680.
USD/CAD failure at the 50 DMA would allow further losses. The first support for the pair would be the confluence of the 100-day DMA and the daily low of Feb 10 at the 1.2632-40 area. A breach of the latter would expose the daily low of March 3 at 1.2587, followed by the 200 DMA at 1.2567, and finally hitting the Jan 19 low at 1.2450.
If the USD/CAD scenario calls for the 50 DMA, the first resistance would be 1.2700. Once cleared, the next level would be the March 2nd high at 12741, followed by the Jan 22nd high at 1.2797 and a three month downtrend line around 1.280030.
Additional technical levels
Source: Fx Street
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