USD/CAD Price Analysis – February 28, 2023

Daily Price Outlook

The USD/CAD pair is currently trading at 1.3573, exhibiting a 0.02% decline over the last 24 hours. The pair has been on a downward trajectory since January due to the weakening of the US dollar in the global market.

Signs of weakening US economy

On February 27, a report showed that Durable Goods Orders fell by 4.5% in January, instead of the expected increase of 3.7%. On the other hand, pending home sales improved by 8.1% to reach 82.5 in January, which was the second consecutive monthly increase.

Additionally, orders that excluded transportation goods increased by 0.7% in the reporting month, compared to the predicted increase of 0.1%.

Despite the positive news, the reported data failed to generate momentum, and the US dollar suffered a sharp loss from its multi-week highs. However, the US Dollar Index (DXY) managed to find support at 104.20.

All eyes on the upcoming Canadian GDP

On Tuesday, February 28th, Statistics Canada is set to release a report on the gross domestic product (GDP) for the fourth quarter. The report is expected to show a moderate increase of 1.5% (annualized) in output during Q4 of 2022.

The GDP figures are likely to have an impact on the Canadian Dollar. However, due to the Bank of Canada's decision to hold off on raising interest rates, the results may not have a significant impact on the USDCAD pair.

Oil prices are low

The increase in the US PCE Price Index has led to a decline in oil prices as investors fear that higher interest rates will limit demand. The oil market is expected to be volatile ahead of the release of the US American Petroleum Institute's (API) report on oil inventories for the week ending February 24.

US West Texas Intermediate (WTI) crude futures declined by 0.03% to reach $75.57 a barrel in the last 24 hours.

As the Canadian dollar is heavily influenced by the oil market, its value fluctuates in response to market sentiment and oil prices. Thus, the CAD is also declining due to the fall in crude oil prices.

USD/CAD Intraday Technical Levels

Support      Resistance

1.3531         1.3622

1.3488         1.3668

1.3441         1.3712

Pivot Point: 1.3578

USD/CAD – Technical Outlook

From a technical perspective, the USD/CAD pair is currently finding support at the $1.3530 level. If this level is breached, the pair could potentially test the $1.3450 support zone. The immediate support level for the USD/CAD pair is $1.3400.

On the other hand, resistance for the pair is located at the $1.3665 level, and a break above this level may expose the pair to the $1.3740 mark.