Technical Analysis

USD/CAD Price Analysis – April 02, 2024

By LonghornFX Technical Analysis
Apr 2, 20243 min

Daily Price Outlook

Despite the bullish crude oil price, the USD/CAD currency pair has maintained its upward trend and remained well bid around the 1.3580 level. However, this bullish performance is driven by several key factors, including reduced bets for a June Fed rate cut, which has boosted the US dollar to multi-week highs. Moreover, the bullish crude oil prices support the CAD, but they have not capped the USD/CAD pair's upward trajectory. Investors and traders will continue to monitor key economic indicators, Fed rate expectations, and oil price dynamics.

US Dollar Strength and Economic Data Influence on USD/CAD Pair

On the US front, the broad-based US dollar gained traction amid reduced expectations for a June Fed rate cut. Investors have scaled back their bets on a potential rate cut by the Federal Reserve following the release of upbeat US economic data. However, the manufacturing sector in the US showed growth in March, marking the first positive growth since September 2022. This positive economic data has supported higher US Treasury bond yields, further bolstering the US Dollar and contributing the USD/CAD pair gains.

Impact of Bullish Crude Oil Prices on USD/CAD Currency Pair

Apart from this, bullish crude oil prices, which typically benefit the Canadian dollar (CAD) due to Canada's status as a major oil exporter, were seen as a key factor that could cap gains in the USD/CAD currency pair. Crude oil prices have remained strong, nearing a five-month high, driven by improved demand and geopolitical tensions in the Middle East. This strength in oil prices has supported the commodity-linked Canadian dollar (CAD), also known as the Loonie.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD - Technical Analysis

The USD/CAD currency pair today registers a modest ascent, with its current trading figure at 1.35799, reflecting a gain of 0.07%. This pair is navigating through essential technical thresholds that provide insight into its imminent trajectory. The pivot point is established at $1.3615, delineating the upcoming market direction.

Resistance levels are pinpointed at $1.3614, $1.3641, and $1.3675, delineating potential barriers for upward price movement. Conversely, support figures are set at $1.3539, $1.3515, and $1.3483, pivotal for counteracting any downward price actions. The technical analysis, spearheaded by the Relative Strength Index (RSI) at 62, signifies a bullish inclination, albeit with caution as it edges towards the overbought zone. The 50-Day Exponential Moving Average (EMA) aligns at 1.3563, further affirming the buying trend near the current price levels.

In conclusion, the trading environment for USD/CAD on April 2 leans towards a bullish perspective, influenced by the technical indicators and market conditions. Observing these technical levels and indicators is imperative for traders to make informed decisions, particularly considering the 50 EMA's support and the RSI nearing the overbought territory.

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