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USDCAD Stopped Below the Resistance Level of 1.3670

3/3/2023 1:36 PM

After a rapid uptrend in the second half of February, the USD/CAD pair is trading below the resistance level of 1.3670, falling at the moment against the backdrop of a correction in Brent Crude Oil quotes, which have added 5.62% since February 23, which led to the strengthening of the Canadian dollar. However, investors' fears about the growing risks of a recession in the global economy are likely to curb the optimism of the buyers of "black gold", and against this background, the downward dynamics of fossil fuel prices may resume, leading to a weakening of the positions of the national currency of Canada. This week, data on the country's Gross Domestic Product (GDP) for the fourth quarter of 2022 was published, which in annual terms decreased to 2.07% from 3.77%, and in quarterly terms it showed a zero value, dropping from 0.6% in the past period. The December value turned out to be negative, amounting to -0.1%, despite the analysts' forecast of 0.1%.

Statistics can act as a catalyst for strengthening the positions of the American currency and breaking through the level of 1.3670. If this happens, then the next buy target will be the level of 1.3800, if it is broken out, the instrument may reach the October high of 1.3960. If the resistance remains at 1.3670, the quotes will drop to the support level of 1.3470, from which it is worth considering new long positions with the target of 1.3670.

The medium-term trend changed to an uptrend last week. New long positions in the asset should be considered on the correction from the key trend support at 1.3412–1.3388, and the first target in this case will be last week's high at 1.3660.

Resistance levels: 1.3670, 1.3800, 1.3960. | Support levels: 1.3470, 1.3270, 1.2970.

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