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The USDCAD went Into a Downward Correction
3/30/2023 12:49 PMThe USD/CAD pair is correcting around 1.3550 against the background of the recovery of oil prices to the level of 73.10, which have gained 9.5% in just two weeks, as well as the weakness of the USD caused by the likely slowdown of the "hawkish" monetary policy of the US Fed amid the absence of reports on the development of the crisis in the banking sector of the country. The next meeting of the regulator will be held on May 2, and at the moment analysts are inclined to a scenario with the interest rate remaining unchanged at the current level of 5.00%. Philip Jefferson, a member of the Board of Governors of the US Fed, also stressed that the agency is still studying the effect of the inflation adjustment already carried out, since the impact on the economy from the tightening of monetary incentives, as a rule, manifests itself for a long time. In addition, investors are still afraid of the transition of the American economy to recession.
Against this background, the quotes of the USD/CAD pair have broken the support level of 1.3650 and are preparing to continue the corrective decline with a target at 1.3450, after which the bidders will be able to consider new purchases of the instrument with a target at 1.3700. The boundary of the long-term uptrend is shifting to the area of 1.3250 and as long as the price is trading above it, the dynamics will remain upward.
On the four-hour chart, you can notice an attempt by sellers to change the mid-term trend to a downward one. At the moment, the price is trading below the key trend support of 1.3601–1.3577, and if it manages to consolidate below this zone, the priority will change, and the sales of the instrument will come to the fore, the target of which will be the target zone 2 (1.3350–1.3327). If the price returns to the 1.3601–1.3577 area before the close of the trading week, then the mid-term trend will remain upward. In this case, it is worth considering long positions in the asset with a target at the March high of 1.3855.
Resistance levels: 1.3700, 1.3830, 1.3960. | Support levels: 1.3450, 1.3250.
