Bulls rise above 1.25 amid weak WTI and the Fed

  • Despite a strong rally, USD/CAD faces tough resistance above the 1.2500 mid-zone.
  • The Canadian dollar was weakened by falling oil prices.
  • This week will be a big week for the unemployment rate in Canada.

USD/CAD outlook is positive after Fed policymakers left hawkish comments. Meanwhile, weak WTI prices are also weighing on the Canadian dollar.

Would you like to learn more about AI trading brokers? Check out our detailed guide-

After seeing a stronger buying reaction near the 1.2400 round number support, the USD/CAD price rallied strongly.

WTI prices fall

Oil prices fell due to increased supply from the United States. Following US President Joe Biden’s announcement that 180 million barrels would be released from the Special Petroleum Reserve (SPR) over the next six months, oil prices turned bearish. There was a significant impact on the Canadian dollar due to the drop in oil prices since Canada is the number one exporter of oil to the United States.

Recent FOMC Minutes

Additionally, hawkish comments from Federal Reserve System (FRS) policymakers strengthened the US Dollar after some time. According to March FOMC minutes on Wednesday, the Fed will raise rates by 50 basis points (bps) this year. In addition, Fed Chairman Jerome Powell promised to hike rates by half a percentage point on two out of seven occasions.

What’s next to watch for the USD/CAD outlook?

Unemployment data from Statistics Canada will be released on Friday and will likely have a major impact on assets. Compared to the previous estimate of 5.5%, the provisional unemployment rate is 5.4%.

Daily Open Interest USD/CAD

The USD/CAD price saw a significant rise yesterday. On the other hand, the daily open interest has also increased. This indicates that new buyers have entered the market. Therefore, the bias is now bullish.

USD/CAD Price Technical Outlook: Bulls Take Charge

USD/CAD outlook

USD/CAD price posted solid gains above the 1.2500 level. Additionally, the pair managed to rise above the 20 and 50 SMA on the 4-hour chart. However, the bulls found a tough resistance around the 100-period SMA.

Are you interested in learning more about spread betting brokers? Check out our detailed guide-

Volume data is positive for the pair. However, the recent consolidation has very low volume, indicating that the market is looking for a catalyst to gain further momentum. Any further buying will find resistance at 1.2590 (previous swing high). On the other hand, the downside move could find support around 1.2500 ahead of 1.2400.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You have to ask yourself if you can afford to take the high risk of losing your money

About Mildred B.

Check Also

Wall Street closes with big gains after Fed interest rate hike

Dow up 2.81%, S&P 500 up 2.99%, Nasdaq up 3.19% Lyft slumps over concerns over …