USD/CAD Price Analysis: Bulls retain control above 1.3800, highest since October 2022 USDCAD Recession Fed Technical Analysis Currencies
A slightly overbought RSI on the daily chart might hold back bulls from placing fresh bets.The USD/CAD pair
attracts some dip-buying near the 1.3785 region and climbs to a fresh high since October 21 during the early North American session on Thursday. The pair currently trades just above the 1.3800 mark and seems poised to extend its recent upward trajectory witnessed over the past three weeks or so. Crude Oil prices languish near the weekly low amid concerns that a deeper global economic downturn will dent fuel demand and fading optimism over a strong recovery in China. This, in turn, is seen undermining the commodity-linked Loonie and acting as a tailwind for the USD/CAD pair. Bulls, meanwhile, seem rather unaffected by a modest US Dollar pullback from over a three-month peak.
The downside for the USD, however, remains cushioned amid bets for a 50 bps lift-off at the upcoming FOMC policy meeting on March 21-22. Moreover, looming recession risks should benefit the safe-haven buck. This, along with the fact that the Bank of Canada became the first major central bank to pause its rate-hiking cycle on Wednesday, validates the positiveFrom a technical perspective, a sustained move beyond the 1.
On the flip side, any meaningful corrective decline now seems to find some support near the 1.3750-1.3745 area. Any further decline is more likely to attract fresh buyers near the 1.3700 horizontal resistance breakpoint. The latter should act as a pivotal point, which if broken might prompt some technical selling and drag the USD/CAD pair back towards the 1.3600 mark en route to the 1.3560 support zone.
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