- The USD/CAD is recovered even more from the minimum of YTD in the middle of some purchases of the USD.
- The hard line pause of the Fed and trade -related optimism provides support to the dollar.
- The increase in oil prices signs the CAD and limits the torque before Trump’s press conference.
The USD/CAD par attracts buyers for the second consecutive day on Thursday and recovers even more than the minimum of the year to date (YTD), about half of the 1,3700 headdresses earlier this week. The impulse raises cash prices to the region of 1,3880-1.3885, or more than a week during the first half of the European session, and is sponsored by some US dollar purchases (USD).
In fact, the USD (DXY) index, which tracks the dollar against a foreign exchange basket, advances towards the 100.00 psychological brand after the hard line of the Federal Reserve (FED) on Wednesday. As expected widely, the US Central Bank maintained the federal fund rate without changes in a range between 4.25%-4.5%. In the accompanying policy statement, the Fed said that uncertainty about economic perspectives has increased even more. In addition, Fed president Jerome Powell said during the press conference after the meeting that short -term inflation expectations have increased after tariffs and added that the right thing is to expect more clarity before adjusting the policy.
The CME Group Fedwatch tool indicated a probability of almost 80% that the US Central Bank maintains the status quo in June. This, in turn, is considered to provide some support to the dollar. However, the markets continue to value a greater probability of at least three rate cuts of 25 basic points (PB) by the Fed by the end of this year. In addition, investors are still concerned about a recession due to the rapid evolution of the position of the US president, Donald Trump, about commercial policies, which acts as a wind against for the USD. In fact, Trump announced 100% tariffs on films produced outside the US on Sunday and also indicated that he plans to impose new tariffs on pharmaceutical imports in the next two weeks.
In addition, Trump said Wednesday that he is not willing to reduce 145% tariffs imposed on China, moderating the hopes of a rapid resolution of the commercial war between the two largest economies in the world. Trump added that he is in no hurry to sign any agreement, although he said he will announce a great agreement with a large and very respected country later this Thursday. However, Trump’s comments maintain a limit to optimism generated by the announcement of commercial conversations between the US and China later this week and stop the USD bulls when positioning for new profits.
Apart from this, a modest rebound in the prices of crude oil, after the recoil of the previous night from a maximum of a week, points to the CAD linked to raw materials and helps limit the USD/CAD pair. In addition, the expectations of a commercial agreement between the US and Canada could support the Canadian dollar (CAD), which justifies a certain caution before confirming that the currency pair has formed a minimum of the short term and position itself for any additional upward movement.
USD/CAD DAILY GRAPH
Technical perspective
From a technical point of view, the USD/CAD pair remains confined in a family range maintained during the last three weeks. This could still be classified as a phase of bearish consolidation in the context of the recent acute setback slide from a maximum of more than two decades reached in February. In addition, the oscillators in the daily chart, although they have been recovering, still remain in negative territory, which suggests that the upward movement could be seen as a sales opportunity and runs the risk of fading quickly.
Meanwhile, the upper limit of the short -term negotiation range, around the 1,3900 round brand, will probably act as an immediate strong barrier. However, a sustained strength beyond could trigger a short coverage movement and raise the USD/CAD torque to the region of 1,3950-1.3955. The impulse could extend even more, although it is more likely to remain limited near the simple mobile average (SMA), currently located just above the 1.4000 psychological brand.
On the other hand, the minimum of the Asian session, around the neighborhood of 1,3800, could offer some support before the YTD, around the 1,3750 area played on Tuesday. Some continuation sales below the latter will mark a new bearish breakdown and make the USD/CAD pair vulnerable to weakening even more below the round figure of 1,3700, towards the following relevant support near the region of 1,3650-1.3645.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
