The USD/CAD appears for the moment to be in a rather calm trading range. However, the rather steady value around 1.38200 is probably going to vanish soon as financial houses start to gear up for the Canada Gross Domestic Product figures today and a parade of U.S economic releases the remainder of the week. The USD/CAD touched a high of nearly 1.38800 on Friday before starting to incrementally selloff.
Traders participating in the USD/CAD today need to stay alert and they might want to use entry price orders so they are not suddenly burned by volatility that bursts into the Forex market. While the GDP number from Canada is expected to be lackluster and carries an estimated gain of only 0.1%, if there is a surprise it would certainly have an effect on the USD/CAD. However, if the numbers meet expectations or is very close to the anticipated result, all eyes will begin to look at the U.S. markets.
USD/CAD is Near Highs as Bearish Traders Wait for Reversal Lower
Traders who are looking at one and three-month charts of the USD/CAD will certainly see the currency pair remains within its higher elements. The USD/CAD is now within in sight of highs seen in March of this year and slightly below highs achieved in the middle of October 2022. Speculators may believe the resistance levels are enticing enough to wage on lower values developing.
The U.S. Federal Reserve has made it relatively clear they will not raise interest rates tomorrow, but they will likely continue to sound quite hawkish about the potential of raising the Federal Funds Rate again if needed. Today’s CB Consumer Confidence number from the U.S. should be watched.
U.S Consumers and Risk Adverse Conditions Making for Choppy Conditions
American consumers have proven buyers and this is causing the Fed headaches, but there are signs U.S consumers are not buying big ticket items – meaning they are becoming more cautious regarding their outlook on expensive purchases. However, not only is the U.S economic data important, but global risk-averse conditions still shadow the broad financial markets and this could cause support levels in the USD/CAD to also remain firm if financial institutions view the USD as a safe haven.
- If the USD/CAD falls below the 1.38200 level and sustains values below, after the Canadian GDP and U.S CB Consumer Confidence reports, this could be a bearish signal for the currency pair.
- Traders should remain cautious, but the notion the USD/CAD is within sight of important resistance levels may make selling the Forex pair attractive for cautious short-term wagers seeking realistic targets below.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.38275
Current Support: 1.38160
High Target: 1.38620
Low Target: 1.37870
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