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The USDCAD is Consolidating Near Local Lows
3/31/2023 10:58 AMDuring the Asian session, the USD/CAD pair shows ambiguous trading dynamics, consolidating near the local lows of February 21 at 1.3530.
During the week, the US currency was steadily declining against the improving investor risk sentiment, as the threat of a banking crisis in the US receded. Market activity remains low, as traders close some of their long positions before the weekend and expect the publication on Friday of statistics on the dynamics of personal income and expenses of citizens for February. Traders analyze yesterday’s data on the dynamics of Q4 2022 gross domestic product (GDP): the final estimate reflected an increase in the indicator by 2.6%, while the former one assumed an increase of 2.7% and the first one – by 2.9 %. Data on the labor market also disappointed investors: the number of initial applications for unemployment benefits for the week of March 24 increased from 191.0K to 198.0K, worse than expected to rise to 196.0K, and the number of secondary applications for the week by March, 17, increased from 1.685M to 1.689M, while analysts expected growth to 1.697M.
On Friday, experts will focus on January statistics on the dynamics of Canadian gross domestic product (GDP): forecasts suggest a 0.3% MoM increase in the economy after a correction of –0.1% in December 2022.
On the daily chart, Bollinger bands are steadily declining: the price range is expanding but not as fast as the "bearish" sentiment develops. The MACD indicator is falling, keeping a strong sell signal (the histogram is below the signal line) and trying to consolidate below the zero mark. Stochastic, having approached its minimum levels, is trying to reverse upwards, indicating that the US dollar may become oversold in the ultra-short term.
Resistance levels: 1.3550, 1.3600, 1.3650, 1.3700. | Support levels: 1.3500, 1.3450, 1.3400, 1.3350.
