- USD/CAD is trying to recoup the day’s losses after suffering a drop.
- The CAD is receiving support from the continued rise in oil costs.
- USD/CAD recovers towards 50% of the day’s retracement.
He USD/CAD began Tuesday in free fall, retreating from the day’s open near 1.3480 and reaching 1.3380. Rising oil prices are boosting the Canadian Dollar (CAD) as concerns about global supply constraints cause crude oil costs to peak.
Despite the decline in CAD, USD/CAD is recovering towards the mid zone. Dollar traders remain attentive to the next publication of the Federal Reserve (Fed) that is just around the corner.
Fed will keep rates on hold, but investors will watch rhetoric
The Fed’s latest rate call will drop in markets on Wednesday, while the Fed’s rate call and subsequent press conference are scheduled for tomorrow at 18:00 GMT.
The Fed is generally expected to leave rates unchanged for the time being, keeping benchmarks at 5.5%. The Federal Open Market Committee (FOMC) will also release its economic projections and inflation outlook figures, something investors will be quick to process.
It’s a light economic calendar week for the CAD, and market momentum will be firmly in the hands of crude oil and dollar traders.
USD/CAD Technical Outlook
USD/CAD is testing the 1.3450 level in late trading of the day, after the rapid decline earlier in the session.
The pair lost 0.72% from Tuesday’s opening prices, near 1.3475, but the midday recovery brings the pair closer to the 68% retracement of the day’s decline.
The rapid rise in crude oil prices has driven the USD/CAD pair lower on daily candles, and the pair has closed in the red for seven of the last eight consecutive trading sessions.
The USD/CAD pair has declined beyond the 200-day simple moving average (SMA) in trading on Tuesday. If the selling pressure continues, the pair will challenge the latest low near 1.3100, while a bullish recovery will have to reclaim the 1.3700 area to establish a decided uptrend.
USD/CAD Daily Chart
USD/CAD Technical Levels
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.
