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USDCAD Quotes has Reached the Upper Limit of the Range 1.35-1.325

2/20/2023 1:21 PM

The quotes of the USD/CAD pair suspended movement under the upper limit of the 1.3500–1.3250 range, where it has been trading for the last month. The breakdown of this boundary will largely depend on the publication of the minutes of the Federal Open Market Committee (FOMC) on Wednesday, February 22, where investors expect to find hints that will prompt them the further direction of the regulator's monetary policy.

Attention should also be payed to the publication of inflation data for January in Canada, which will be held tomorrow at 15:30 (GMT+2). The basic consumer price index is expected to be 5.5% in annual terms. If the actual value turns out to be higher than the forecast, it will strengthen the Canadian dollar and push the USD/CAD pair down from the resistance level of 1.3500. Conversely, values below the forecast are likely to lead to an increase in quotations and a breakout of the 1.3500 level.

In case of a breakout of the 1.3500 mark, the long-term trend will change to an upward one, and the target for purchases will be the resistance level of 1.3671. In turn, a breakout of the 1.3671 mark will open the prospects for the growth of the USD/CAD pair to the levels of 1.3800 and 1.3960. Holding the 1.3500 mark will mean the weakness of the payers and the continuation of the decline in the long term with a target at 1.3250, the breakdown of which will open the way for further decline to the 1.2970 area.

The mid-term trend is still downtrend. Last week, the price reached the key resistance level of 1.3532–1.3509. Holding this area will allow sellers to continue the decline of the USD/CAD pair with a target at the February minimum at 1.3270. A breakout of the key resistance of the trend will lead to an increase in quotations in the mid-term with a target in the target zone 2 (1.3790–1.3765).

Resistance levels: 1.3500, 1.3670, 1.3800, 1.3960. | Support levels: 1.3250, 1.2970, 1.2740.

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