Daily Price Outlook

The USD/CAD currency pair experienced a decline and still showing bearish bias around 1.3590 level. This downward performance can be attributed to several factors influencing both the US Dollar and the Canadian Dollar. However, the lower US Treasury yields put pressure on the US dollar, which was seen as a key factor that kept the USDCAD pair under pressure. Market sentiment indicates expectations of the Federal Reserve (Fed) commencing an easing cycle, starting in June. This anticipation of monetary policy adjustments weighs on the Greenback's strength, impacting its performance against the Canadian Dollar.

Furthermore, the CAD faced downward pressure following indications from the Bank of Canada (BoC) regarding possible rate cuts in 2024. The BoC's latest meeting minutes revealed discussions around quantitative tightening and the sustainability of incremental interest rate decreases. This stance adds to the bearish sentiment surrounding the CAD, contributing to the USD/CAD pair's downward trajectory.

Apart from this, fluctuations in Crude oil prices play a crucial role in influencing the performance of the Canadian Dollar. As one of Canada's major exports, changes in oil prices directly impact the country's economy and currency. The recent decline in oil prices added pressure on the CAD, helping USD/CAD pair's to limit its losses.

Fed Projected Three Rate Cuts in 2024 Undermine the USD and Impact on USD/CAD

On the US front, Federal Reserve's projected three rate cuts in 2024, which undermine the USD's strength, consequently impacting the USD/CAD currency pair. However, the ongoing speculations surrounding the Fed's monetary policy decisions have contributed to market uncertainty and downward pressure on the dollar.

Atlanta Fed President Raphael Bostic's anticipation of only one rate cut contrasts with Chicago Fed President Austan Goolsbee's forecast of three cuts. This divergence in views reflects the uncertainty surrounding the timing and magnitude of potential rate adjustments. However, both perspectives emphasize the potential disruption and impact on market sentiment if rates are reduced prematurely.

Therefore, the anticipation of a more accommodative monetary policy stance from the Fed weakens the USD against other major currencies, including the CAD.

Bank of Canada's Possible Rate Cuts in 2024 Exert Downward Pressure on CAD and USD/CAD Pair

On the Canadian front, the Bank of Canada's indication of possible rate cuts in 2024, as revealed in its latest meeting minutes, has exerted downward pressure on the CAD and influenced the USD/CAD currency pair. Deputy Governor Toni Gravelle reaffirmed the bank's plan to gradually reduce the money supply, ensuring that interest rates decrease in a sustainable manner.

Investors closely monitor central bank meetings and announcements for insights into future monetary policy decisions. The BoC's discussion of potential rate cuts signals a dovish stance, impacting market sentiment and investor confidence in the CAD. As expectations of lower interest rates in Canada increase, the CAD weakens against other currencies, including the USD. This contributes to the downward trajectory of the USD/CAD pair as traders adjust their positions in response to shifting monetary policy expectations.

Decline in Crude Oil Prices Adds Pressure to CAD and USD/CAD Pair

On the other hand, the recent decline in Crude oil prices has added pressure to the CAD and reinforced the downward trend of the USD/CAD currency pair. Oil prices are a significant driver of the Canadian economy, given Canada's status as a major oil exporter. The drop in oil prices negatively impacts Canada's export revenues and economic outlook, leading to a depreciation of the CAD.

USD/CAD - Technical Analysis

The USD/CAD pair experienced a slight uptick in today’s market, registering a 0.01% increase to stand at 1.3586. This movement, albeit minimal, indicates a nuanced market environment where traders are gauging several factors before making significant commitments.

A closer inspection reveals that the pair is trading near a pivot point of 1.3615, suggesting a potential pivot in market direction. Resistance levels are delineated at 1.3615, 1.3661, and 1.3711, pointing towards key barriers that could cap upward movements. Conversely, the support framework is established at 1.3540, with further layers at 1.3506 and 1.3459, providing cushions that could arrest downward trends. The Relative Strength Index (RSI) sits at 56, indicating a slight lean towards a bullish sentiment but still far from the overbought threshold. Additionally, the 50-Day Exponential Moving Average (EMA) at 1.3549 reinforces the pair's underlying bullish inclination by positioning just below current price levels.

Based on this analysis, a strategic approach suggests setting a buy limit at 1.35733, with an aim to take profits at 1.36154, and a stop loss positioned at 1.35386.

Related News

- GOLD Price Analysis – March 26, 2024

- AUD/USD Price Analysis – March 26, 2024

- USD/CAD Price Analysis – March 19, 2024

Daily Price Outlook

- USD/CAD experiences slight growth, showcasing potential for further appreciation with immediate support and resistance levels highlighted.

- Momentum indicators, including a bullish engulfing pattern and RSI, suggest a strong uptrend with the 50-day EMA providing additional support.

- Recommended buying strategy above 1.35498, with defined targets and stop loss to capitalize on the bullish momentum.

The USD/CAD pair has shown resilience, marking a modest increase of 0.12% to 1.35649. This uptick suggests a positive sentiment towards the US dollar against the Canadian dollar, as the pair navigates through key technical levels. The currency's pivotal point is located at 1.3525, serving as a fundamental marker for the pair's short-term direction. Resistance levels are established at 1.3591, 1.3624, and 1.3647, marking potential hurdles for upward movements. Conversely, support is found at 1.3486, with additional levels at 1.3456 and 1.3421, where the pair might find buying interest.

A noteworthy observation comes from the RSI at 64, indicating momentum leaning towards the overbought territory but still suggesting room for further gains. The emergence of a bullish engulfing candlestick pattern above the 1.3550 level reinforces the prospect of a continuing uptrend. Furthermore, the 50-day EMA at 1.3519, now below the current price, acts as a support level, bolstering the bullish case for the USD/CAD pair.

Given these dynamics, a strategic entry for a long position is advised above 1.35498, targeting a move towards 1.35913 for potential profits. A stop loss at 1.35173 is recommended to mitigate risk, aligning with a prudent trading strategy.

USD/CAD - Trade Ideas

Entry Price – Buy Above 1.35498

Take Profit – 1.35913

Stop Loss – 1.35173

Risk to Reward – 1: 1.28

Profit & Loss Per Standard Lot = +$415/ -$325

Profit & Loss Per Mini Lot = +$41/ -$32

Daily Price Outlook

During the early European session, the USD/CAD currency pair maintained its upward trend and remained well bid around the 1.3595 level. The upward trend can be attributed to several factors, including the strength of the US dollar. The US dollar has gained traction following a hawkish outlook by the Federal Reserve. Additionally, a mild decline in crude oil prices was seen as a key factor that undermined the Canadian dollar and contributed to the gains in the USD/CAD currency pair.

Impact on USD/CAD Pair Amidst Hawkish Fed Outlook and Economic Data

On the US front, the broad-based US Dollar maintained its upward trend and edged higher on the day amid the Fed hawkish outlook. Investors are eagerly waiting for the US Federal Reserve (Fed) to announce its decision on interest rates this Wednesday. It's expected that the Fed will keep interest rates high due to recent inflationary pressures. However, the previously released data, particularly the higher-than-expected Core Producer Price Index and US PPI, suggests increased inflation pressures, which supports the hawkish Fed outlook and strengthens the US dollar.

It should be noted that the probability of a rate cut in March is only 1.0%, and slightly higher at 8.7% for May, according to the CME FedWatch Tool. The likelihood of rate cuts in June and July is even lower, at 55.1% and 73.7% respectively.

On the data front, the US Michigan Consumer Sentiment Index for March dropped to 76.5 from 76.9, which was unexpected. Meanwhile, Industrial Production slightly increased by 0.1% in February, better than expected. The Core Producer Price Index stayed steady at 2.0% year-over-year in February, higher than expected. US PPI rose by 1.6% year-over-year and 0.6% month-over-month, surpassing forecasts, indicating increased inflation pressures.

Therefore, the unexpected drop in consumer sentiment and the higher-than-expected inflation data could potentially strengthen the US dollar and weigh on the Canadian dollar, leading to upward pressure on the USD/CAD pair.

Impact of Oil Prices and Fed Decision on USD/CAD Pair

On the other side, crude oil prices moved down because Russia might start producing more oil, and industries like airlines aren't using as much fuel as usual. Also, traders are being cautious before the Federal Reserve decides on U.S. interest rates. This drop in oil prices made the Canadian dollar weaker. Hence, the USD/CAD pair is likely to strengthen due to lower crude oil prices and a weakened Canadian dollar amid increased oil production by Russia and uncertainty over US interest rates.

USD/CAD - Technical Analysis

The USD/CAD pair has shown resilience, marking a modest increase of 0.12% to 1.35649. This uptick suggests a positive sentiment towards the US dollar against the Canadian dollar, as the pair navigates through key technical levels. The currency's pivotal point is located at 1.3525, serving as a fundamental marker for the pair's short-term direction. Resistance levels are established at 1.3591, 1.3624, and 1.3647, marking potential hurdles for upward movements. Conversely, support is found at 1.3486, with additional levels at 1.3456 and 1.3421, where the pair might find buying interest.

A noteworthy observation comes from the RSI at 64, indicating momentum leaning towards the overbought territory but still suggesting room for further gains. The emergence of a bullish engulfing candlestick pattern above the 1.3550 level reinforces the prospect of a continuing uptrend. Furthermore, the 50-day EMA at 1.3519, now below the current price, acts as a support level, bolstering the bullish case for the USD/CAD pair.

Given these dynamics, a strategic entry for a long position is advised above 1.35498, targeting a move towards 1.35913 for potential profits. A stop loss at 1.35173 is recommended to mitigate risk, aligning with a prudent trading strategy.

Related News

- GOLD Price Analysis – March 19, 2024

- AUD/USD Price Analysis – March 19, 2024

- USD/CAD Price Analysis – March 12, 2024

Daily Price Outlook 

The USD/CAD currency pair continued its bearish trend, remaining well offered around the 1.3472 level. However, the downward trend can be attributed to the bearish US dollar, which was being pressured by increasing speculation of a Fed rate cut in June. However, the bearish US dollar was seen as a key factor that kept the USD/CAD pair down. Furthermore, crude oil prices rose as geopolitical tensions in the Middle East continued to spur concern. Hence, higher crude oil prices typically support the Canadian dollar, as Canada is a major exporter of oil, which often leads to a decrease in the USD/CAD pair.

In contrast to this, Bank of Canada Governor Tiff Macklem's statement that it's premature to ease monetary policy despite cooling inflation could be seen as negative for the Canadian dollar. It suggests interest rates may not rise soon, weakening the currency.

Impact of Bank of Canada's Interest Rate Decision on USD/CAD Pair

On the Canadian front, the Bank of Canada (BoC) recently decided to keep its interest rate steady at 5.0%, which was widely anticipated. BoC Governor Tiff Macklem emphasized during a press conference that they're not ready to lower interest rates yet. He explained that they want to see more progress in controlling core inflation before considering any rate cuts. Macklem said they need to wait longer for higher rates to work. So, the market now expects a rate cut in July instead of June, making the Canadian Dollar stronger against the US Dollar.

Therefore, the delay in expected rate cuts by the Bank of Canada has strengthened the Canadian Dollar (CAD), causing the USD/CAD pair to face downward pressure as the CAD gains strength.

Impact of US Labor Market Data and Fed's Dovish Remarks on USD/CAD Pair

On the US front, the labor market data for February showed mixed results, failing to meet the Fed's expectations for a strong recovery. Moreover, dovish remarks from Federal Reserve officials last week reinforced the anticipation of a rate cut in June. Fed Chair Powell mentioned during his semiannual testimony that while more confidence is needed before lowering rates, they're not far from considering it. Currently, around 70% odds of a rate cut by June are being priced in by money markets, according to the CME FedWatch tool. This uncertainty about future interest rates is influencing the market sentiment regarding the US Dollar.

Therefore, the anticipation of a rate cut by the Fed in June, due to mixed US labor market data and dovish remarks, could weaken the US Dollar (USD) against the Canadian Dollar (CAD).

USD/CAD - Technical Analysis

In today's trading, the USD/CAD pair experienced a minor decline of 0.07%, settling at 1.34724. This slight movement reflects a cautious sentiment in the market, underscoring the pair's struggle for direction amid conflicting economic indicators from both the United States and Canada. Analyzing the four-hour chart, the pair currently trades just above the pivot point of 1.34587, indicating a precarious balance between buyers and sellers.

Resistance levels identified at 1.35140, 1.35453, and 1.35696 denote potential obstacles for any bullish momentum. Conversely, immediate support lies at 1.34522, with further cushions at 1.34130 and 1.33766 to arrest any downward movement. The Relative Strength Index (RSI) standing at 42 points towards a slight bearish bias but remains distant from the oversold territory, suggesting room for downward movement without immediate risk of reversal.

The 50-day Exponential Moving Average (EMA) at 1.35099, currently above the price, serves as a short-term resistance level, reinforcing the bearish outlook. The observation of multiple Doji candles below the pivot point hints at market indecision, yet leans towards a potential bearish shift given the current positioning.

Given these technical insights, the USD/CAD pair exhibits a cautious bearish sentiment. Traders might consider entering a sell position below 1.34829, targeting a take profit at 1.34528, with a stop loss set at 1.35143 to mitigate risk. This strategy aligns with the observed market dynamics and technical indicators, suggesting a slight selling pressure might prevail in the near term.

Related News

- GOLD Price Analysis – March 12, 2024

- AUD/USD Price Analysis – March 12, 2024

- USD/CAD Price Analysis – March 05, 2024

Daily Price Outlook

- USD/CAD's minor downturn reflects market uncertainty, highlighting key resistance and support for future movements.

- RSI and 50 EMA indicate a slight bearish bias, suggesting room for further decline within cautious trading boundaries.

- Observations of Doji candles beneath the pivot point reinforce a potential lean towards selling, guiding a prudent bearish approach.

In today's trading, the USD/CAD pair experienced a minor decline of 0.07%, settling at 1.34724. This slight movement reflects a cautious sentiment in the market, underscoring the pair's struggle for direction amid conflicting economic indicators from both the United States and Canada. Analyzing the four-hour chart, the pair currently trades just above the pivot point of 1.34587, indicating a precarious balance between buyers and sellers.

Resistance levels identified at 1.35140, 1.35453, and 1.35696 denote potential obstacles for any bullish momentum. Conversely, immediate support lies at 1.34522, with further cushions at 1.34130 and 1.33766 to arrest any downward movement. The Relative Strength Index (RSI) standing at 42 points towards a slight bearish bias but remains distant from the oversold territory, suggesting room for downward movement without immediate risk of reversal.

The 50-day Exponential Moving Average (EMA) at 1.35099, currently above the price, serves as a short-term resistance level, reinforcing the bearish outlook. The observation of multiple Doji candles below the pivot point hints at market indecision, yet leans towards a potential bearish shift given the current positioning.

Given these technical insights, the USD/CAD pair exhibits a cautious bearish sentiment. Traders might consider entering a sell position below 1.34829, targeting a take profit at 1.34528, with a stop loss set at 1.35143 to mitigate risk. This strategy aligns with the observed market dynamics and technical indicators, suggesting a slight selling pressure might prevail in the near term.

USD/CAD - Trade Ideas

Entry Price – Sell Below 1.34829

Take Profit – 1.34528

Stop Loss – 1.35143

Risk to Reward – 1: 1

Profit & Loss Per Standard Lot = +$301/ -$314

Profit & Loss Per Mini Lot = +$30/ -$31

Daily Price Outlook

During the Asian session, the USD/CAD currency pair maintained its upward trend and remained well bid around the 1.3595 level. However, the reason for its upward trend can be attributed to multiple factors, including the renewed strength of the US dollar. Despite disappointing US economic data, the US dollar has been declining, but it recently gained traction following a hawkish stance by the Federal Reserve. Additionally, dovish remarks from the Bank of Canada governor were seen as a key factor that undermined the Canadian dollar and contributed to the gains in the USD/CAD currency pair. Furthermore, the decline in crude oil prices further undermined the Canadian dollar and lent support to the USD/CAD currency pair.

Federal Reserve's Hawkish Stance Supports USD Strength

On the US front, the Federal Reserve is expected to keep interest rates steady at its March meeting, between 5.25% and 5.5%. The market predicts the first rate cut in June, but this could change if inflation slows or wages keep rising. Fed President Raphael Bostic stated that there's no rush to lower rates due to a strong economy and job market. Central banks, like the Fed, adjust their stance based on economic data, leading to shifts between dovish and hawkish tones. Therefore, this recent hawkish statement helped the US dollar gain strength and supported the USD/CAD currency pair.

Bank of Canada's Dovish Signals and Oil Price Decline Weaken CAD

On the Canadian side, the Bank of Canada (BoC) is expected to maintain its current interest rate of 5.0% during the upcoming meeting. Investors are predicting an 80% likelihood of the first rate cut happening around June. During the press conference, clues regarding the timing of rate cuts could be disclosed. If the BoC governor expresses dovish sentiments, indicating a cautious or accommodative monetary policy stance, it could weaken the Canadian Dollar (CAD). This happens because dovish remarks suggest potential future interest rate cuts, which can reduce the attractiveness of the currency for investors, leading to selling pressure on the CAD.

Hence, the dovish signals from the BoC, hinting at potential rate cuts, could weaken the Canadian Dollar (CAD) against the US Dollar (USD), possibly leading to upward pressure on the USD/CAD currency pair.

On the other hand, decline in the crude oil prices could further support the USD/CAD currency pair by undermining the Canadian dollar. Crude oil prices dropped for a second consecutive day on Tuesday as investors remained worried about reduced consumption, leading to the decline in oil prices.

USD/CAD - Technical Analysis

The USD/CAD pair showcased a modest uptick on March 5, indicating slight bullish sentiment in the market. The currency pair closed the session at 1.35796, marking a 0.05% increase. This movement is reflective of the ongoing adjustments in the currency markets, as traders align their positions based on the latest economic indicators and geopolitical developments.

The currency's pivot point at 1.3551 serves as a critical juncture, with immediate resistance observed at 1.3616. Further resistance levels are noted at 1.3674 and 1.3741, suggesting potential ceilings for upward movements. Conversely, the immediate support level at 1.3494, followed by 1.3427 and 1.3370, indicates where buyers might step in to uphold the currency's value.

Technical indicators offer a nuanced view of the market dynamics. The Relative Strength Index (RSI) stands at 58, hinting at neither overbought nor oversold conditions, thereby providing room for further movement in either direction. The Moving Average Convergence Divergence (MACD) shows a slight divergence, with a value of -0.0002 against a signal of 0.0009, suggesting mixed signals about the market's direction. However, the close proximity of the 50-Day Exponential Moving Average (EMA) at 1.3572 to the current price underlines the currency pair's stability in the near term.

Daily Outlook

The USD/CAD pair showcased a modest uptick on March 5, indicating slight bullish sentiment in the market. The currency pair closed the session at 1.35796, marking a 0.05% increase. This movement is reflective of the ongoing adjustments in the currency markets, as traders align their positions based on the latest economic indicators and geopolitical developments.

The currency's pivot point at 1.3551 serves as a critical juncture, with immediate resistance observed at 1.3616. Further resistance levels are noted at 1.3674 and 1.3741, suggesting potential ceilings for upward movements. Conversely, the immediate support level at 1.3494, followed by 1.3427 and 1.3370, indicates where buyers might step in to uphold the currency's value.

Technical indicators offer a nuanced view of the market dynamics. The Relative Strength Index (RSI) stands at 58, hinting at neither overbought nor oversold conditions, thereby providing room for further movement in either direction. The Moving Average Convergence Divergence (MACD) shows a slight divergence, with a value of -0.0002 against a signal of 0.0009, suggesting mixed signals about the market's direction. However, the close proximity of the 50-Day Exponential Moving Average (EMA) at 1.3572 to the current price underlines the currency pair's stability in the near term.

USD/CAD - Trade Ideas

Entry Price – Buy Above 1.35874

Take Profit – 1.36216

Stop Loss – 1.35647

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$342/ -$227

Profit & Loss Per Mini Lot = +$34/ -$22

Daily Price Outlook 

The USD/CAD pair has exhibited a modest uptick of 0.01%, positioning itself at 1.35066 as of February 27. This minor increase underscores a period of consolidation within the forex market, with technical indicators and price movements suggesting a mix of stability and potential volatility.

Key technical levels frame the current landscape for USD/CAD. The pivot point at 1.3454 acts as a foundational benchmark, with immediate resistance observed at 1.3492. Further resistance levels at 1.3551 and 1.3589 delineate potential ceilings for price ascensions. On the flip side, support levels at 1.3403, 1.3357, and 1.3319 serve as critical junctures where buying interest may resurface to bolster the pair.

The Relative Strength Index (RSI) at 51 indicates a market in equilibrium, hinting at a balanced dynamic between buyers and sellers. The Moving Average Convergence Divergence (MACD) presents a value of 0.00014 against a signal of 0.00032, suggesting a cautious market sentiment with potential for directional shifts. The 50-day Exponential Moving Average (EMA) at 1.3506 closely mirrors the current price, reinforcing the state of consolidation.

A symmetrical triangle pattern observed on the chart signals a consolidation phase for the Canadian dollar, with a bearish engulfing pattern and a cross below the 50 EMA potentially indicating an impending selling trend. This technical setup suggests a cautiously bearish outlook in the short term.

USD/CAD - Trade Ideas

Entry Price – Sell Below 1.35269

Take Profit – 1.34718

Stop Loss – 1.35573

Risk to Reward – 1: 1.8

Profit & Loss Per Standard Lot = +$551/ -$304

Profit & Loss Per Mini Lot = +$55/ -$30

Daily Price Outlook

Despite the Canadian CPI inflation data showing a larger-than-anticipated easing to 2.9% in January, the USD/CAD currency pair continued its downward trajectory, lingering around the 1.3520 level. However, this decline cannot solely be attributed to Canadian economic factors. The weakening of the US dollar has played a significant role in the bearish trend.

The US dollar had initially been on a bullish run, fueled by the Federal Reserve's adoption of a hawkish stance and positive US economic indicators. Nonetheless, this bullish momentum has faded recently as the release of the FOMC minutes revealed concerns among policymakers regarding the potential risks of rapid rate cuts. Hence, the dovish comments from Fed officials further undermined the US dollar, consequently exerting downward pressure on the USD/CAD pair.

On the other hand, crude oil prices increased on Tuesday. However, the rise was driven by concerns about reduced oil supplies due to ongoing disruptions in global shipping and conflicts in the Middle East. The stability in oil prices could support the Canadian dollar and contribute to losses in the USD/CAD pair.

Fed Plans for Interest Rate Cuts and Potential Impact on USD/CAD Pair

On the US front, the Federal Reserve, led by Chairman Jerome Powell, expressed a cautious approach toward lowering interest rates. Powell mentioned that the Fed wants to ensure that inflation consistently reaches the 2% target before considering rate cuts. Additionally, the minutes from the Federal Open Market Committee (FOMC) meeting revealed concerns among some policymakers about the potential risks associated with reducing interest rates too quickly.

Hence, these dovish remarks are bearish for the US dollar because they indicate a cautious approach to lowering interest rates, potentially reducing its attractiveness to investors seeking higher returns.

Anticipated Bank of Canada Rate Cuts and Impact on USD/CAD Pair

On the Canadian side, inflation data for January showed a lower increase than expected, reaching 2.9%. This unexpected data has led to speculation that the Bank of Canada might consider lowering interest rates sooner than previously anticipated. While most analysts expect the central bank to maintain interest rates at 5.0% during its upcoming meeting on March 6th, the likelihood of a rate cut at the April meeting has increased to 58% following the release of the Consumer Price Index (CPI) report. This shift in expectations suggests that the central bank may be more inclined to take action to stimulate the economy in response to lower-than-expected inflation.

Therefore, the anticipated rate cuts by the Bank of Canada may weaken the Canadian dollar, potentially causing the USD/CAD currency pair to rise as the US dollar gains strength.

Upcoming Economic Data Releases Impacting CAD Currency Pairs

Looking ahead, investors are keeping their eyes on upcoming economic indicators like US Durable Goods Orders, Consumer Confidence, and the Richmond Fed Manufacturing Index, along with remarks from Fed's Michael Barr.

USD/CAD - Technical Analysis

The USD/CAD pair has exhibited a modest uptick of 0.01%, positioning itself at 1.35066 as of February 27. This minor increase underscores a period of consolidation within the forex market, with technical indicators and price movements suggesting a mix of stability and potential volatility.

Key technical levels frame the current landscape for USD/CAD. The pivot point at 1.3454 acts as a foundational benchmark, with immediate resistance observed at 1.3492. Further resistance levels at 1.3551 and 1.3589 delineate potential ceilings for price ascensions. On the flip side, support levels at 1.3403, 1.3357, and 1.3319 serve as critical junctures where buying interest may resurface to bolster the pair.

The Relative Strength Index (RSI) at 51 indicates a market in equilibrium, hinting at a balanced dynamic between buyers and sellers. The Moving Average Convergence Divergence (MACD) presents a value of 0.00014 against a signal of 0.00032, suggesting a cautious market sentiment with potential for directional shifts. The 50-day Exponential Moving Average (EMA) at 1.3506 closely mirrors the current price, reinforcing the state of consolidation.

A symmetrical triangle pattern observed on the chart signals a consolidation phase for the Canadian dollar, with a bearish engulfing pattern and a cross below the 50 EMA potentially indicating an impending selling trend. This technical setup suggests a cautiously bearish outlook in the short term.

Daily Price Outlook

Despite the renewed strength in crude oil, the USD/CAD pair maintained its upward trend and remained well-bid around the $1.3510 level. However, the upward trend was mainly reinforced by the renewed strength of the US dollar, which gained traction on the back of upbeat US data. In contrast, stronger crude oil prices tend to underpin the Canadian dollar, which was seen as a key factor that could cap further gains in the USD/CAD pair. Moving on, traders seem hesitant to place any strong positions as Canadian inflation data will be in the spotlight on Tuesday and could trigger volatility in the market ahead of the FOMC Minutes.

Positive Momentum for US Dollar Supporting USD/CAD Pair

On the US front, the broad-based US dollar extended its gains on the day and was being buoyed by robust inflation data. In the meantime, the trading on the day is subdued as US markets were closed for Presidents' Day. Investors are now awaiting the release of the Federal Open Market Committee meeting minutes for clues on future interest rate moves. However the analysts anticipate the Fed may start cutting rates from July 2024, with a 53% chance of a 0.25% reduction by June. Despite recent dovish remarks from Fed officials like Mary C. Daly and James Bullard, the dollar retained its strength.

Therefore, the positive momentum for the US dollar could continue to support the USD/CAD pair as investors await further clarity on future interest rate decisions from the Federal Reserve.

Canada's January CPI Release and Long-Term Factors Limiting Gains for USD/CAD Pair

On the other hand, Canada's January Consumer Price Index (CPI) is set for release on Tuesday, expected to dip from 3.4% YoY in December to 3.3% in January. Meanwhile, the Bank of Canada (BoC) has pointed out the significant role housing has played in propping up inflation. Markets don't foresee the BoC cutting interest rates before its June monetary policy decision. Furthermore, the surge in crude oil prices could support the Canadian dollar, as Canada is a major oil exporter to the US. The Canadian Dollar (CAD) tends to react strongly to oil price changes, potentially limiting gains for the USD/CAD pair.

Hence, the factors mentioned, including expectations of steady interest rates by the Bank of Canada and the potential support from rising oil prices for the Canadian Dollar, could limit gains for the USD/CAD pair.

USD/CAD - Technical Analysis

The USD/CAD pair has witnessed a marginal increase of 0.12%, currently trading at 1.35078, signaling a slight bullish momentum in early trading hours. This move reflects a cautious optimism in the market, with the pair navigating above the pivotal 1.3503 mark, which serves as today's technical fulcrum. The immediate resistance levels are set at 1.3568, 1.3657, and 1.3731, outlining potential hurdles that could cap further gains. Conversely, support is found at 1.3411, with additional safety nets at 1.3343 and 1.3257, marking zones where buyers might step in to stabilize or push the pair higher.

The Relative Strength Index (RSI) at 54 indicates a slightly bullish sentiment, suggesting that the market is neither overbought nor oversold, providing room for potential upward movement. Moreover, the MACD’s positive divergence from its signal line at 0.00013 against -0.00019 hints at growing bullish momentum, reinforcing the likelihood of an upward trajectory.

The 50-Day Exponential Moving Average (EMA) at 1.3493 further supports this bullish outlook, as the pair's current price action remains above this key indicator. Given these technical indicators, the market's orientation seems inclined towards a bullish bias, contingent on maintaining momentum above the 1.34925 pivot. As such, entering a long position above this threshold with a target of 1.35437 and a stop loss set at 1.34527 could capitalize on the anticipated ascent, adhering to a disciplined risk management strategy.