Home Stock USD/CAD: Temporary outcomes and quick prospects – Analytics & Forecasts – 29 August 2023

USD/CAD: Temporary outcomes and quick prospects – Analytics & Forecasts – 29 August 2023

USD/CAD: Temporary outcomes and quick prospects – Analytics & Forecasts – 29 August 2023


Subsequent week (Wednesday) the following assembly of the Financial institution of Canada will happen, and economists worry that within the context of accelerated inflation, the leaders of the Canadian Central Financial institution shall be compelled to go for a brand new enhance in rates of interest, even regardless of the dangers of plunging the nationwide financial system into recession.

All this, oddly sufficient, has a unfavorable influence on the Canadian greenback (often, when the rate of interest is predicted to rise, the quotes of the nationwide foreign money strengthen).

In all probability, right here an necessary position within the dynamics of the Canadian greenback, in addition to different main commodity currencies, is performed by macro statistics coming from China, indicating a slowdown in enterprise exercise, industrial manufacturing and a drop in retail gross sales.

Market contributors additionally proceed to judge the outcomes of the Fed Chairman Powell’s speech at a symposium in Jackson Gap, and the DXY greenback index broke via 104.00 on the finish of final week and up to date a 5-month excessive at 104.38.

Powell famous the steadiness of the US financial system and a powerful nationwide labor market, confirming the readiness of the Fed leaders to additional tighten financial coverage. This contributes to the expansion of market expectations for an additional rate of interest hike in direction of the tip of the yr, though they haven’t modified in relation to the September assembly of the Fed.

Will the Financial institution of Canada be capable of elevate the rate of interest once more within the face of accelerated inflation, however a slowdown within the nationwide financial system?

Given the hawkish rhetoric of the Fed leaders concerning the prospects for the financial coverage of the US Central Financial institution, we should always most likely anticipate additional progress within the USD/CAD pair.

The closest targets are positioned at native resistance ranges 1.3665, 1.3700, distant ones – at native resistance ranges 1.3810, 1.3860.

In another situation, USD/CAD will resume its decline. The primary promote sign is a breakdown of the assist stage at 1.3592 and right this moment’s low at 1.3586, and the confirming sign is a breakdown of the necessary short-term assist stage at 1.3553.

Assist ranges: 1.3593, 1.3586, 1.3553, 1.3500, 1.3450, 1.3425, 1.3405, 1.3380, 1.3320, 1.3300, 1.3200, 1.3170, 1.3100

Resistance ranges: 1.3640, 1.3665, 1.3700, 1.3810, 1.3860, 1.3900, 1.3970, 1.4000

*) see additionally

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·         https://www.instaforex.com/forex_analysis/353041?x=PKEZZ

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