Daily Price Outlook

Despite the lower-than-expected Canadian CPI, the USD/CAD pair failed to sustain its upward momentum, showing a bearish performance due to a weakening US dollar. The dollar was under pressure due to the dovish stance of the Federal Reserve. However, the dollar's losses may be short-lived, as overall market sentiment leans towards risk aversion, primarily due to escalating tensions in the Middle East. This sentiment could limit the US dollar's losses and, in turn, help the USD/CAD pair avoid deeper declines.

Investors are anticipating the release of Canada's inflation data and the United States' Retail Sales data for September. These upcoming data releases are likely to impact the trading dynamics within the USD/CAD pair.

Market Dynamics and Geopolitical Factors

During the European session, the S&P 500 futures recorded losses, signifying a decrease in risk appetite among market participants. The upward pressure on safe-haven assets is a result of mounting tensions in the Middle East. However, this tension is exacerbated by Israel's preparations for a ground offensive in Gaza against Hamas. Notably, the visit of US President Joe Biden to Israel takes center stage, with the primary objective being the safe evacuation of civilians amid the ongoing military actions by Palestinian groups.

The US Dollar Index (DXY) hovers around 106.60 as investors anticipate the Federal Reserve (Fed) will maintain interest rates on November 1. This expectation stems from Fed policymakers advocating for steady rates at 5.25-5.50%, given the persistence of multi-year high long-term bond yields, which are expected to constrain spending and investments.

Focus on Canadian Dollar: Inflation Data for September

Looking forward, investors are keeping a close eye on the coming inflation data for September. The headline Consumer Price Index (CPI) is expected to increase by 0.1% on a monthly basis, a drop from the previous 0.4% rise. The annual headline CPI, however, is anticipated to maintain a steady growth rate of 4%. Additionally, the core CPI figures are expected to show a consistent expansion, with a 0.1% increase monthly and a 3.3% increase on an annual basis.

Therefore, the lower-than-expected Canadian CPI may weaken the Canadian Dollar (CAD), potentially strengthening the USD/CAD pair as investors seek the stronger US dollar.

USD/CAD - Technical Analysis

The USD/CAD currency pair, as of October 17, has been recorded at 1.3631, marking an appreciation of 0.15%. This assessment, based on a 2-hour chart timeframe, reveals distinct price benchmarks that can guide traders. A pivot point for the pair is found at 1.3637.

On the upside, potential resistances are outlined at 1.3695, followed by more substantial barriers at 1.3745 and 1.3785. In contrast, the downside reveals immediate support at 1.3607, with successive support zones at 1.3581 and 1.3545.

Delving into technical indicators, the Relative Strength Index (RSI) has posted a value of 48. This slightly sub-midpoint value suggests a mild bearish sentiment, as RSI values below 50 tend to be indicative of bearish sentiment.

From the perspective of moving averages, the 50-Day Exponential Moving Average (EMA) is situated precisely at the pivot point of 1.3637. This means that the pair is hovering around this average, indicating a potential tipping point between short-term bullish and bearish trends.

No particular chart pattern has been highlighted for the session. However, its implications are paramount in deducing price movement tendencies.

In summation, the overarching trend for the USD/CAD pair seems to lean bearish if it goes below 1.3637, with the possibility of turning bullish if it crosses above. Given the existing market sentiment and technical configurations, traders should be on the lookout for possible challenges or confirmations of these levels in upcoming sessions.

Related News

Daily Price Outlook

The USD/CAD currency pair, as of October 17, has been recorded at 1.3631, marking an appreciation of 0.15%. This assessment, based on a 2-hour chart timeframe, reveals distinct price benchmarks that can guide traders. A pivot point for the pair is found at 1.3637.

On the upside, potential resistances are outlined at 1.3695, followed by more substantial barriers at 1.3745 and 1.3785. In contrast, the downside reveals immediate support at 1.3607, with successive support zones at 1.3581 and 1.3545.

Delving into technical indicators, the Relative Strength Index (RSI) has posted a value of 48. This slightly sub-midpoint value suggests a mild bearish sentiment, as RSI values below 50 tend to be indicative of bearish sentiment.

From the perspective of moving averages, the 50-Day Exponential Moving Average (EMA) is situated precisely at the pivot point of 1.3637. This means that the pair is hovering around this average, indicating a potential tipping point between short-term bullish and bearish trends.

No particular chart pattern has been highlighted for the session. However, its implications are paramount in deducing price movement tendencies.

In summation, the overarching trend for the USD/CAD pair seems to lean bearish if it goes below 1.3637, with the possibility of turning bullish if it crosses above. Given the existing market sentiment and technical configurations, traders should be on the lookout for possible challenges or confirmations of these levels in upcoming sessions.

USD/CAD - Trade Idea

Entry Price – Sell Limit 1.36372

Take Profit – 1.35781

Stop Loss – 1.36778

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$591/ -$406

Profit & Loss Per Micro Lot = +$59/ -$40

Daily Price Outlook

During the early European session on Tuesday, the USD/CAD currency pair continued its losing streak for the fourth day, trading lower at around 1.3570. However, the reason for its bearish rally could be linked to the combination of factors. First, the price of oil has been going up a lot, and that is causing problems for the USD/CAD pair. However, the increase in oil prices could be attributed to the ongoing conflict in the Gaza Strip. The ongoing issues in the Middle East are making oil prices go up because people are worried about what's happening there. Since the Canadian Dollar (CAD) is closely linked to oil prices, it's getting stronger and contributing to the losses in the USD/CAD pair.

Geopolitical Tensions Boost Oil Prices and Strengthen the Canadian Dollar

Despite a Thanksgiving holiday in Canada, the ongoing global tensions are still having a major impact. These tensions are causing Crude Oil prices to go up, mainly because people are worried about what's happening in the Middle East. This, in turn, is making the Canadian Dollar (CAD) stronger because it is closely connected to oil prices. On Monday, the price of Western Texas Intermediate (WTI) oil shot up to $86.01 per barrel, which was the biggest increase in six months. However, by Tuesday, it had come down a bit to $84.70.

US Dollar Weakening Despite Positive Job Data and Lower Bond Yields

The broad-based US dollar failed to maintained its strong gaining streak and lost some of its ground despite some positive US job data released on Friday. However, this lack of a strong dollar can be linked to a drop in US Treasury yields on Monday, especially the 10-year US Treasury bond yield, which was at 4.64% at the moment.

Furthermore, comments from Federal Reserve (Fed) officials overnight made investors less confident about the likelihood of more interest rate hikes, which led to even lower US bond yields. As a result, this situation is seen as weakening the US dollar and creating headwinds for the USD/CAD currency pair.

Dallas Fed President Lori Logan suggested there might not be a need to raise interest rates, and Fed Vice Chair Philip Jefferson emphasized the importance of caution in making any more rate increases. The US Dollar Index (DXY) has been losing value for the fifth day in a row, and it's now trading around 106.00 at the moment.

Market Sentiment Shifts Amidst Geopolitical Tensions

Despite the tensions between Hamas and Israel, the overall mood in the financial markets has turned positive. This change has lessened the appeal of the US dollar as a safe-haven currency, which has put pressure on the USD/CAD pair.

Investors will be keeping a close eye on the upcoming release of the FOMC meeting minutes scheduled for Wednesday. People are curious about how this will affect expectations regarding the Federal Reserve's next moves, which could impact the demand for the US dollar.

Traders will also be watching the US Core Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday. These events are important for understanding inflation trends and the US economy.

USD/CAD - Technical Analysis

The USD/CAD pair has seen a decline of nearly 0.75% since the opening on Monday, with the current price at 1.3585. This movement reflects the dynamics of the US Dollar (USD) against the Canadian Dollar (CAD) and has implications for traders and investors.

Analyzing the 4-hour chart, the pivot point is at 1.3645, serving as a critical reference point. Immediate resistance levels include 1.3557, followed by 1.3500 and 1.3421. These levels represent significant barriers that may influence price action. On the support side, immediate levels are at 1.3698, with subsequent support at 1.3789 and 1.3852, indicating potential areas for reversals or continuations.

Examining technical indicators, the Relative Strength Index (RSI) registers at 34, suggesting a relatively bearish sentiment in the market. The 50-Day Exponential Moving Average (50 EMA) stands at 1.3630, indicating that the price is currently below this level, aligning with a short-term bearish trend.

One notable chart pattern is the bearish sentiment below the pivot point at 1.3645. Traders should also pay attention to the 1.3556 level, which represents the 61.8% Fibonacci retracement level. This level can act as a critical support or resistance point, depending on the price movement.

In conclusion, the overall trend for USD/CAD appears bearish, especially below the pivot point at 1.3645. Traders should closely monitor this key level for potential trading opportunities in the coming days. The short-term forecast suggests the possibility of testing the resistance at 1.3557 and beyond.

Related News:

Daily Price Outlook

The USD/CAD pair has seen a decline of nearly 0.75% since the opening on Monday, with the current price at 1.3585. This movement reflects the dynamics of the US Dollar (USD) against the Canadian Dollar (CAD) and has implications for traders and investors.

Analyzing the 4-hour chart, the pivot point is at 1.3645, serving as a critical reference point. Immediate resistance levels include 1.3557, followed by 1.3500 and 1.3421. These levels represent significant barriers that may influence price action. On the support side, immediate levels are at 1.3698, with subsequent support at 1.3789 and 1.3852, indicating potential areas for reversals or continuations.

Examining technical indicators, the Relative Strength Index (RSI) registers at 34, suggesting a relatively bearish sentiment in the market. The 50-Day Exponential Moving Average (50 EMA) stands at 1.3630, indicating that the price is currently below this level, aligning with a short-term bearish trend.

One notable chart pattern is the bearish sentiment below the pivot point at 1.3645. Traders should also pay attention to the 1.3556 level, which represents the 61.8% Fibonacci retracement level. This level can act as a critical support or resistance point, depending on the price movement.

In conclusion, the overall trend for USD/CAD appears bearish, especially below the pivot point at 1.3645. Traders should closely monitor this key level for potential trading opportunities in the coming days. The short-term forecast suggests the possibility of testing the resistance at 1.3557 and beyond.

USD/CAD - Trade Idea

Entry Price – Sell Limit 1.3645

Take Profit – 1.3499

Stop Loss – 1.3714

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$1341/ -$826

Profit & Loss Per Micro Lot = +$134/ -$82

Daily Price Outlook

During the early European trading session, the USD/CAD pair continued its upward momentum, marking the third consecutive day of gains. It surged to its highest level since late March, driven by several key factors. Firstly, the Canadian dollar, often referred to as the Loonie, faced increasing pressure due to the declining oil prices, which pushed the USD/CAD pair higher. Another factor boosted the currency pair is the Federal Reserve's adoption of a more hawkish stance, which underpinned the US dollar and contributed to the USD/CAD pair gains.

Strength of the US Dollar and Its Impact on USD/CAD

The US dollar has been getting stronger lately, reaching a 10-month high. This is mainly because people believe that the Federal Reserve (Fed) will continue to be strict with its monetary policy. The US is also seeing strong economic data, which supports this belief. Cleveland Fed President Loretta Mester's comments have added to this, suggesting that the Fed will keep interest rates high for a while. As a result, the yields on the 10-year US government bonds are at their highest in 16 years. Additionally, with the market feeling cautious, investors are choosing the safe US dollar, which is helping the USD/CAD pair go up.

Challenges for the Canadian Dollar (CAD)

The Canadian Dollar (CAD) is facing challenges as people believe the Bank of Canada (BoC) won't raise interest rates anymore. This belief grew stronger when Canada's economy didn't grow in July, with manufacturing seeing its biggest drop in over two years. In June, the economy even shrank by 0.2%. This suggests the BoC might keep interest rates steady despite rising prices. In the meantime, the falling oil prices for four consecutive days are undermining the CAD and contributing the USD/CAD gains.

USD/CAD - Technical Analysis

The USD/CAD pair exhibited notable strength in its previous session, successfully exceeding our initial target of 1.3585 and advancing to our secondary objective at 1.3680. The currency pair has begun today's trading with a further ascent, breaking past this level, thereby reinforcing its dominant bullish trajectory for both intraday and short-term perspectives, paving the way towards a potential target of 1.3805.

Given the current dynamics, the bullish outlook remains robust and is further endorsed by the EMA50. However, it's crucial to mention that if the pair fails to maintain its position above 1.3680, it could reverse into a bearish correction.

Today, the anticipated trading bracket for USD/CAD is delineated between a support level of 1.3640 and a resistance threshold of 1.3780.

Daily Price Outlook

The USD/CAD pair exhibited notable strength in its previous session, successfully exceeding our initial target of 1.3585 and advancing to our secondary objective at 1.3680. The currency pair has begun today's trading with a further ascent, breaking past this level, thereby reinforcing its dominant bullish trajectory for both intraday and short-term perspectives, paving the way towards a potential target of 1.3805.

Given the current dynamics, the bullish outlook remains robust and is further endorsed by the EMA50. However, it's crucial to mention that if the pair fails to maintain its position above 1.3680, it could reverse into a bearish correction.

Today, the anticipated trading bracket for USD/CAD is delineated between a support level of 1.3640 and a resistance threshold of 1.3780.

USD/CAD - Trade Idea

Entry Price – Sell Limit 1.37210

Take Profit – 1.36375

Stop Loss – 1.37685

Risk to Reward – 1: 1.7

Profit & Loss Per Standard Lot = +$835/ -$475

Profit & Loss Per Micro Lot = +$83/ -$47

Daily Price Outlook

The USD/CAD currency pair has initiated a downward trajectory, exerting pressure on the pivotal support level at 1.3480. In light of this movement, it is prudent to remain neutral until a clearer directional signal emerges, which could be ascertained through either a breach of the aforementioned support or a surpassing of the 1.3520 resistance level.

It's crucial to underscore that if the support is compromised, it could pave the way for the currency pair to revert to a bearish trajectory, targeting subsequent levels at 1.3400 and then potentially 1.3359. Conversely, if the pair manages to overcome the resistance, it could potentially signify the rejuvenation of a bullish trend, with the next significant objective positioned at 1.3585.

For today's trading activities, the anticipated range is demarcated between the support at 1.3410 and the resistance at 1.3560. The prevailing sentiment for the day remains neutral.

USD/CAD - Trade Idea 

Entry Price – Sell Below 1.35132

Take Profit – 1.33283

Stop Loss – 1.36014

Risk to Reward – 1: 2

Profit & Loss Per Standard Lot = +$1849/ -$882

Profit & Loss Per Micro Lot = +$184/ -$88

Daily Price Outlook

During this European session on Friday, the USD/CAD currency pair experienced a resurgence in buying interest, successfully putting an end to its two-day losing streak. However, this uptick in momentum was due to the weakening of Crude Oil prices, which undermined the canadian dollar and acted as a supportive factor for the USD/CAD pair. Simultaneously, the US Dollar received a boost from the Federal Reserve's hawkish stance, further contributing to the pair's upward movement. Looking ahead, traders approached the market cautiously, refraining from taking strong positions, as they awaited crucial economic data releases, including the US Core PCE Price Index and Canadian GDP figures.

Crude Oil Price Drop and Its Impact on USD/CAD Pair

It is worth noting that the crude oil price dropped below the one-year high it had reached the previous day. This decline in oil prices is having an impact on the Canadian dollar, which tends to move in sync with oil, and it's giving a boost to the USD/CAD pair. However, the reason behind this fall in oil prices is the anticipation that Russia and Saudi Arabia may increase their oil production. This expectation is overshadowing the positive outlook for increased oil demand from China during its Golden Week holiday. As a result, traders are becoming less confident about the prospects of oil prices rising, particularly following this week's nearly 8% surge from the mid-$88.00s.

US Dollar Strength Supports USD/CAD Pair

Another factor boosting the USD/CAD pair is the overall strength of the US Dollar (USD). Investors are overlooking somewhat lackluster US economic data from Thursday and are instead focusing on the Federal Reserve's efforts to prevent the USD from declining. Just last week, the central bank warned that persistent inflation in the US might lead to at least one more interest rate hike before the year's end.

Looking forward, all eyes are on the release of the US Core PCE Price Index, which is the Fed's preferred measure of inflation. This data will influence market expectations regarding the Fed's next moves, impacting USD demand and providing fresh momentum to the USD/CAD pair. Traders on Friday will also be watching the monthly Canadian GDP figures and the dynamics of oil prices for short-term trading opportunities.

USD/CAD - Technical Analysis

The USD/CAD currency pair has initiated a downward trajectory, exerting pressure on the pivotal support level at 1.3480. In light of this movement, it is prudent to remain neutral until a clearer directional signal emerges, which could be ascertained through either a breach of the aforementioned support or a surpassing of the 1.3520 resistance level.

It's crucial to underscore that if the support is compromised, it could pave the way for the currency pair to revert to a bearish trajectory, targeting subsequent levels at 1.3400 and then potentially 1.3359. Conversely, if the pair manages to overcome the resistance, it could potentially signify the rejuvenation of a bullish trend, with the next significant objective positioned at 1.3585.

For today's trading activities, the anticipated range is demarcated between the support at 1.3410 and the resistance at 1.3560. The prevailing sentiment for the day remains neutral.

Daily Price Outlook

USD/CAD advanced during intraday trading, subsequently testing the crucial resistance level at 1.3300. Additionally, it approached the resistance of the 50-day SMA and tested the short-term downward secondary trend line. The RSI displayed negative signals after entering the overbought zone.

Based on these factors, we anticipate the pair to retrace lower, with a target towards the initial support at 1.3200, under the condition that the resistance at 1.3300 remains intact.

The projected trading range for today lies between the support level of 1.3200 and the resistance level of 1.3300.

Our price prediction for today suggests a likely bullish trend. Traders are advised to closely monitor the price action and consider this bullish outlook when planning their trading strategies for USD/CAD. However, prudent risk management practices should be implemented due to the dynamic nature of the market. 

USD/CAD - Trade Idea

Entry Price – Buy Above 1.32618

Take Profit – 1.33822

Stop Loss – 1.31970

Risk to Reward – 1: 1.86

Profit & Loss Per Standard Lot = +$120/ -$64

Daily Price Outlook

The USD/CAD currency pair showed positive momentum for the second consecutive day on Wednesday. In the Asian session, it briefly dipped to around 1.3260 but quickly recovered, moving closer to the three-week high it reached the day before. Despite the upward trend, bullish traders are exercising caution and waiting for sustained strength above the key 1.3300 level before considering further upward moves. However, this cautious approach reflects the market's desire for more confirmation of the pair's strength before committing to higher positions.

Fed's Rate Hike Expectations Support US Dollar Amid Credit Rating Downgrade

Despite a credit rating downgrade of the US government's credit to AA+ from AAA by Fitch, the US Dollar (USD) is still strong. This is because the Federal Reserve (Fed) is expected to raise interest rates by 25 basis points one more time. Fed Chair Jerome Powell said the economy needs to slow down and the job market needs to weaken for inflation to return to the 2% target. However, the stronger US economic data supporting the chance of more rate hikes adds to the positive feeling about the USD.

Global Risk Sentiment Weighs on Equity Markets, Benefits Safe-Haven USD

Moreover, the USD/CAD currency pair is getting further support as global risk sentiment weakens, and investors turn to the US Dollar as a safe-haven asset. However, the surge in Crude Oil prices, hitting the highest level since April 17, supports the commodity-linked Canadian Dollar (CAD) and may hold back aggressive buying of the USD/CAD pair. This could limit aggressive buying of the USD/CAD pair. Although, the decrease in US oil inventories helps balance demand worries and keeps supporting Oil prices, adding to the strength of the Canadian Dollar.

Traders should pay close attention to short-term opportunities and keep an eye on the monthly employment reports (NFP report) from the US and Canada, scheduled for release on Friday. These reports can greatly influence the movement of the USD/CAD pair.

USD/CAD - Technical Analysis

USD/CAD advanced during intraday trading, subsequently testing the crucial resistance level at 1.3300. Additionally, it approached the resistance of the 50-day SMA and tested the short-term downward secondary trend line. The RSI displayed negative signals after entering the overbought zone.

Based on these factors, we anticipate the pair to retrace lower, with a target towards the initial support at 1.3200, under the condition that the resistance at 1.3300 remains intact.

The projected trading range for today lies between the support level of 1.3200 and the resistance level of 1.3300.

Our price prediction for today suggests a likely bullish trend. Traders are advised to closely monitor the price action and consider this bullish outlook when planning their trading strategies for USD/CAD. However, prudent risk management practices should be implemented due to the dynamic nature of the market.