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The USDCAD Consolidates Near 1.3750

3/16/2023 11:18 AM

During the Asian session, the USD/CAD pair is slightly declining, consolidating near the level of 1.3750.

Yesterday, the US currency showed a noticeable growth, which allowed it to almost completely recover from the decline at the beginning of the week when there were reports of the closure of Silicon Valley Bank and Signature Bank, which caused a wave of negative market sentiment that pushed the quotes downwards sharply. The Treasury Department and the US Federal Reserve were quick to reassure investors, promising to compensate for all losses of depositors and launching an additional Bank Temp Financing Program (BTFP) to prevent such events in the future. Experts expect the regulator to take a pause in the monetary tightening cycle and abandon its decision to raise interest rates by 25.0 basis points next week.

Poor US macroeconomic statistics affect the national currency negatively: in February, retail sales adjusted by –0.4% after an increase of 3.2% earlier against expectations of –0.3%, and the manufacturing PMI of the Federal Reserve Bank (FRB) of New York in March fell from –5.8 points to –24.6 points, significantly worse than analysts' forecasts of –8.0 points. The producer price index in February fell from 5.7% to 4.6%, while the forecast for a slowdown was only 5.4%, and by 0.1% MoM after rising by 0.3% a month earlier.

On the daily chart, Bollinger Bands are actively growing: the price range is narrowing, reflecting the emergence of multidirectional dynamics in the short term. The MACD indicator is falling, keeping a poor sell signal (the histogram is below the signal line). Stochastic, having reacted to the active growth of the instrument yesterday, reversed into an upward plane, signaling in favor of the development of corrective growth soon.

Resistance levels: 1.3800, 1.3860, 1.3900, 1.3950. | Support levels: 1.3750, 1.3700, 1.3650, 1.3600.

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