USD/CAD Forecast: USD Shoots Higher Against CAD – 08 March 2023
The size of the candlestick during the day also suggest that the market continues to see a lot of buying pressure building up.
The USD/CAD exchange rate has rallied rather significantly during the trading session on Thursday as Jerome Powell reiterated the need to stay “tighter for longer” by the Federal Reserve in front of Congress. Quite frankly, this is a market that is more likely than not going to remain very volatile and choppy, because the 2 economies do so much business with each other. This is a lot like the EUR/GBP pair, with a lot of the transactions being done out of necessity, not necessarily speculation. Nonetheless, we certainly have an upward trajectory, and it now looks as if the market may try to get to the 1.38 level above.
The 1.38 level is an area where we have seen a lot of selling pressure previously, and as you can see, back in October it was the area where a lot of sellers stepped in.At this point, the market is likely to continue to see a big fight, but I think it is more likely than not going to get broken at this rate.After all, we have the Federal Reserve remaining tight, and the Bank of Canada already stating that it is basically done with its tightening policy.
Another thing that could offer a bit of momentum in this market to the upside is the fact that oil remained somewhat muted, which would be the other reason why people may want to buy the Canadian dollar, if crude oil was really starting to take off again. That being said, I think the 1.36 level underneath should continue to be important, so pay close attention to that area. If we were to see that area being broken to the downside, that probably sends the market much lower, perhaps down to the 200 day EMA, which is closer to the 1.33 level. Either way, it looks as if the buyers are going to continue to be very aggressive, and I think given enough time we will eventually break and try to go to the 1.40 level if there continues to be more of a “risk off” attitude out there, which quite frankly with all of the noise out there it makes quite a bit of sense. The size of the candlestick during the day also suggest that the market continues to see a lot of buying pressure building up.
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