USD/CAD Price Analysis: Trades within DMAs as bears regain control in the short term
- The USD/CAD pairs some Wednesday’s losses, though struggles to reclaim the 50-DMA, which could spur a leg-down.
- Negative market sentiment, keep safe-haven peers buoyant.
- USD/CAD Technical Outlook: Neutral biased but could turn neutral-downwards if USD/CAD bulls struggle at 1.2680, 50-DMA.
Trapped between the 50 and 100-day moving averages (DMAs) after a steeper loss on Wednesday while the Bank of Canada (BoC) hiked 25 basis points to its Bank Rate to 0.50%, the USD/CAD edges higher. At the time of writing, the USD/CAD is trading at 1.2661, 40-pips short of the 1.2700 mark.
Geopolitical headlines hit the financial markets again. While Russia-Ukraine held the second round of talks in Belarus, the Ukrainian military reported that Belarus troops received the order to cross the Ukrainian border. Said that the market mood still dampened as witnessed in global equities. The CAD weakened against safe-haven peers amid rising US crude oil prices cling to the $110 mark.
The Bank of Canada Governor Macklem crosses the wires at press time, and you can follow the coverage here.
USD/CAD Price Forecast: Technical outlook
The USD/CAD bias is neutral, but it could be “neutral-downwards.” Why? Because on March 2 recorded a daily close below February 10 low at 1.2632, breaking the previous market structure; nevertheless, on Thursday, the USD/CAD recovered but is struggling to break above the 50-DMA at 1.2680.
USD/CAD’s failure at the 50-DMA would allow further losses. The pair’s first support would be the confluence of the 100-DMA and February 10 daily low in the 1.2632-40 area. Breach of the latter would expose March 3 daily low at 1.2587, followed by the 200-DMA at 1.2567, and ultimately would reach January 19 low at 1.2450.
If the scenario of the USD/CAD reclaiming the 50-DMA, the first resistance would be 1.2700. Once cleared, the next ceiling level would be March 2 high at 1,2741, followed by January 22 high at 1.2797 and a three-month-old downslope trendline around 1.280030.
