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USDCAD Market Update

2/2/2023 12:34 PM

Against a decline in US dollar quotes, the USD/CAD pair is correcting around 1.3275.

The Canadian currency continues its local upward trend supported by statistical publications: the country's economy in November last year increased by 0.1%, comparable to the dynamics of October, and the annual gross domestic product (GDP) slowed down to 2.80% YoY from 3.10% earlier compared to analysts' expectations of an acceleration of the indicator to 3.50%. Manufacturing PMI, released yesterday, rose to 51.0 points for the first time since September from 49.2 points earlier.

As analysts predicted, the US Federal Reserve reduced the pace of interest rate hikes to 0.25%, bringing it to 4.75%, and the head of the regulator, Jerome Powell, noted that the current period reflected a reduction in inflation, which, however, was not supported by a fall in the economy and is a positive signal. However, there is no talk of lowering the interest rate soon, and in the best case, the agency will determine the period during which the indicator will be kept unchanged to assess the effectiveness of the measures already taken.

On the daily chart, the trading instrument is moving within the global downward channel with dynamic boundaries 1.3580–1.3000, falling toward the support line.

Technical indicators maintain a sell signal: the range of EMA fluctuations on the Alligator indicator expands downwards, and the AO histogram forms downward bars, falling in the sell zone.

Resistance levels: 1.3300, 1.3480. | Support levels: 1.3220, 1.3000.

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