Thursday, November 30, 2023
  • Home
  • About Us
  • Advertise
  • Contact Us
  • Login
  • Register
MYFOREX Analyst
No Result
View All Result
Forex Training
Open Account
  • Global Financial News
  • Analyst Guide
    • FX Analyst pieces
    • Scrum session
    • Market Analysis
  • Indicators
    • Trends
    • Oscillator
  • Education Materials
    • PDF
    • Videos
  • Expert Advisors
  • Get Trade Signal
  • Global Financial News
  • Analyst Guide
    • FX Analyst pieces
    • Scrum session
    • Market Analysis
  • Indicators
    • Trends
    • Oscillator
  • Education Materials
    • PDF
    • Videos
  • Expert Advisors
  • Get Trade Signal
MYFOREX Analyst
Home Global Financial News

Q2 Top Trade Idea: Long USD/CAD, Rate Differential and Price

fxanalyst by fxanalyst
April 23, 2023
in Global Financial News
0
152
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter

Long USD/CAD: Rate Differential and Price Action Support Further Upside Narrative.

The Canadian Dollar has suffered against the Greenback since the Bank of Canada (BoC) announced a pause to its hiking cycle. The BoC started out very aggressively when hiking rates and if recent inflation data is anything to go by the BoC may have gotten it right, one of the few Central Banks who are seeing results thus far when it comes to the inflation fight. The YoY inflation rate in Canada has been on a steady decline since a peak print of 8.1 % in June 2022 with the February 2023 figure showing a drop of 0.7% coming in at 5.2% (Estimates of 5.9%). Of course, this trade seemed more of a slam dunk about two weeks ago but the recent banking sector turmoil out of the US has seen the Fed funds peak rate expectations for 2023 take quite a dive and put pressure on the US Dollar.

The recent FOMC meeting (March 21-22) however saw the FED continue their hiking cycle with markets pricing in a further hike in May before a pause. Fed Chair Powell stated that the chance of cuts this year remains slim despite the tightening credit conditions. Whether or not we get a rate hike in May the technical outlook and fundamentals still support further upside in USDCAD in my opinion.

TECHNICAL ANALYSIS

USD/CAD WEEKLY CHART

image1.png

Chart prepared by Zain Vawda, using TradingView

From a technical perspective, looking at the overall structure on a weekly timeframe we have made a series of higher highs and higher lows since the November 2022 swing low.

On the Daily Chart below, we also have just seen a golden cross develop with the 50-day MA rising above the longer-term 100-day MA which is usually indicative of a strong bull market.

USD/CAD DAILY CHART

image2.png

Chart prepared by Zain Vawda, using TradingView

Looking at the potential scenarios which could come into play on USDCAD, the most risk-averse entry opportunity is likely to present itself with a break and candle close above the trendline or a break and then a potential retest. However, there is also the possibility of a push down toward the support level of 1.3660-1.3650 which provides an even better risk to reward opportunity. A break of this support does not invalidate the bullish bias however with long term support at the previous swing high on the weekly timeframe at 1.3300 holding the key to a shift in bias. A weekly candle close below the 1.3300 handle would invalidate the bullish setup.

Upside resistance and potential target areas rest around 1.3850, the psychological 1.4000 level, and 1.4170 handle respectively.

Contact and follow Zain on Twitter @zvawda

Previous Post

Euro Week Ahead Forecast: EUR/USD Looking to Build A New

Next Post

Australian Dollar Outlook: Bonds and CPI Might Drive the RBA

Related Posts

#POLYGON #MATIC Long-Term targets, until end of 2025 for CRYPTO:MATICUSD

November 30, 2023

Australia CPI inflation eases more than expected in Oct, but

November 30, 2023

Japanese Inflation (MoM) Accelerates to 10-Year High, USD/JPY Holds Firm

November 30, 2023

Australia Oct inflation slows more than expected as goods prices

November 30, 2023

Nvidia Pulls Back After Earnings for NASDAQ:NVDA by TradeStation

November 30, 2023

OPEC+ talks focusing on deeper oil cut, sources say By

November 30, 2023
Next Post

Australian Dollar Outlook: Bonds and CPI Might Drive the RBA

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Economic News

  • Market News
  • Nigerian Financial News
  • Socio economical
  • Technological News
  • Political

Educational Materials

  • Videos
  • PDF
  • Analysis
  • Review sessions

Analyst Guide

  • Expert Advisors
  • FX Analyst pieces
  • Swing Trading sessions
  • Scrum session

Quick Link

  • Expert Advisors
  • Market Analysis
  • About us
  • Advertise with us
  • Contact us
Open Trading Account

© 2022 Myfxanalyst.com by MA Digitals.

Risk Warning

The information and materials submitted by myfxanalyst.com are exclusively for informative/educational purposes, and may not be considered recommendations for buying, selling or keeping financial instruments. Financial Instruments are leveraged instruments that carry a high degree of risk

No Result
View All Result
  • Login
  • Sign Up
  • Home
  • Global Financial News
  • Economic News
  • Analyst Guide/Insights
    • FX Analyst pieces
    • Scrum session
    • Swing Trading sessions
    • Market Analysis
  • Indicators
    • Trends
    • Oscillator
    • Combination of Templates
  • Education Materials
    • PDF
    • Videos
  • Expert Advisors
  • Get Trade Signal
  • Explore
    • About Us
    • Advertise
    • Contact Us
Forex Training

© 2022 Myfxanalyst.com Design by MA Digitals

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In