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The USDCAD Price is Trying to Recover at 1.335

1/30/2023 1:23 PM

On the eve of the US Fed meeting, the USD/CAD pair is trading in the area of 1.3350–1.3250 in anticipation of the driver of further growth with a target at 1.3500.

On February 1, the US Fed will announce the decision on the interest rate, and the value can be adjusted by 25.0 basis points to 4.75%. Investors are probably already putting this increase in the price of the USD, so the most important are the subsequent comments of the head of the regulator Jerome Powell. If the official confirms the commitment of the US Fed to further tight monetary policy, then the USD may move into a strengthening phase, pushing the USD/CAD pair up to the 1.3500 area.

An additional factor weakening the Canadian dollar is the decline in oil prices, which is currently losing 4.2% from January highs.

The long-term trend in the USD/CAD pair remains downward, its main target is to update the November 2022 minimum in the area of 1.3250.  The inability of sellers to update this level will characterize the weakness of the trend and increase the risk of an upward correction with a target at 1.3500. It is advisable to consider new sales of the instrument when correcting from the level of 1.3500 or 1.3670.

The mid-term trend is downward. The sales target is the target zone 1.3205–1.3182. The trend boundary is shifting to the levels of 1.3572–1.3548, and if this area is reached by the price as part of an upward correction, it will be possible to consider new sales of the instrument with the first target at last week's low of 1.3300.

Resistance levels: 1.3500, 1.3670. | Support levels: 1.3250, 1.2970.

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