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USDCAD Ambiguous Nature of Trading in the Short Term

3/24/2023 11:11 AM

During the Asian session, the USD/CAD pair is growing slightly, recovering from an uncertain decline yesterday and again testing 1.3720 for a breakout.

The American currency remains under moderate pressure after the publication of the US Federal Reserve's decision on monetary policy: the regulator, as expected, increased the interest rate by 25 basis points, despite the negative sentiment of investors regarding the situation in the banking sector. Officials explained the next increase in the indicator by the fight against inflation, which remains well above the target level of 2.0%. The accompanying statement opined that an additional increase in the value is practicable in the near term, and according to the summary of economic expectations, the median interest rate forecast for the current year is 5.1%, and next year it is revised from 4.1% to 4.3%. At the same time, the markets are confident that the US Federal Reserve is close to completing the current cycle of tightening monetary policy, and therefore this factor of influence on the dollar is gradually weakening, and the real state of the economy and fears about the stability of the financial sector, which reacted negatively to a sharp increase in the cost of loans, come to the fore.

The focus of investors on Friday will be US statistics on the volume of orders for durable goods in February. During the day, the release of March data on business activity in the manufacturing sector and services from S&P Global is expected. Today, Canada will publish statistics on retail sales for January: forecasts suggest an acceleration of the figure from 0.5% to 0.7%.

On the daily chart, Bollinger bands reverse into a horizontal plane: the price range is narrowing, reflecting the ambiguous nature of trading in the short term. The MACD indicator is falling, keeping a poor sell signal (the histogram is below the signal line). Stochastic, on the contrary, maintains a confident upward trend and practically does not react to an attempt at a corrective decline yesterday.

Resistance levels: 1.3750, 1.3800, 1.3860, 1.3900. | Support levels: 1.3700, 1.3650, 1.3600, 1.3535.

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