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USDCAD Decline Stopped in the Support Area of 1.335

1/23/2023 1:29 PM

After an unsuccessful attempt to break through the resistance level of 1.3500, the USD/CAD pair is actively declining, trading at 1.3350.

Traders do not react to statistics from Canada, where the core inflation fell from 6.1% to 5.4% in December, the commodity price index – decreased by 3.1%, and wholesale sales in November increased by 0.5%, below the previous and the calculated values of 1.9%. The determining factor in the dynamics of quotations is the softening of the “hawkish” rhetoric of the US Federal Reserve expected by investors: on February 1, an increase in interest rates by only 25.0 basis points is predicted, after which the regulator’s transition to a wait-and-see policy is not excluded, which forces investors to abandon the US dollar, redirecting their capital into safer assets.

The long-term trend remains downward: sellers are trying to break the support level of 1.3350, after which the next sell target will be 1.3250, after the breakdown of which, the decline will continue to 1.2970.

The medium-term trend is downward: after the breakdown of the target zone 1.3450–1.3427 two weeks earlier, the sell target became zone 2 (1.3205–1.3182), and the trend border shifted to the levels of 1.3594–1.3570. In case of correction in this area, new sell positions with the first target at January’s low of 1.3324 may be opened.

Resistance levels: 1.3500, 1.3670. | Support levels: 1.3350, 1.3250, 1.2970.

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