- The Loonie continues to rise against the dollar, as USD/CAD shows with a 0.27% drop.
- A mixed market mood keeps the CAD in the driver’s seat amid a firm US dollar.
- USD/CAD Price Forecast: Bias to the downside, threatening to break below 1.2450.
The USD/CAD Posts modest losses as Thursday’s North American session begins, after a subdued overnight session in which the pair traded in the 1.2550-80 range. At time of writing, USD/CAD is trading at 1.2525.
Market sentiment is mixed. European stocks fluctuate while US stocks are gaining, except for the Russell 2000. The dollar is holding firm on the session, as the US dollar index shows, rising just 0.08% to trade at 98.685. US Treasury yields rebound from Wednesday’s slide, led by benchmark 10-year yields at 2,357%, up three and a half points.
Events in Eastern Europe made headlines
The Russia-Ukraine conflict remains unchanged. Although lately, at the time of publication, Barak Ravid Axio reported via Twitter that Ukraine’s Chief of Staff Andriy Yermmak said that he had made progress in ceasefire negotiations with Russia. If that is achieved, market sentiment will react positively to the news.
Meanwhile, the two-day NATO summit in Brussels began. According to a senior US administration official, US President Biden told NATO that he supported NATO’s troop surge on the Eastern Front. Additionally, the US has spoken with allies about helping Ukraine obtain anti-ship missiles.
Aside from this, the benchmark US WTI crude oil index is down nearly 0.90% on the day, below the $113.50 mark, halting the Canadian dollar’s appreciation due to its correlation with oil prices.
The US economic docket featured initial jobless claims for the week ending March 17, which fell to the lowest level since 1969 as demand for labor far outstrips supply and runaway inflation keeps High incentive to work.
USD/CAD Price Forecast: Technical Outlook
USD/CAD has been steadily falling for five consecutive days between 50-60 pips and is about to challenge the 3rd Sep 2021 support at 1.2493. Furthermore, USD/CAD broke below a five-month uptrend line on Wednesday, putting additional downward pressure on the pair.
That said, the first support for the USD/CAD would be 1.2500. Once cleared, it would immediately test the 1.2493 level mentioned above, followed by the yearly low hit on Jan 19 at 1.2450. The break of the latter would open the door for a retest on October 21, 2021, at 1.2288.
Additional technical levels
Source: Fx Street
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