Usdcad rises slightly as markets await key economic events in US and Canada

USDCAD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.03%	4 Pips
Week to-date	-0.52%	-75 Pips
March	-1.18%	-170 Pips

Upcoming key events (London Time)

Wed 06:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 06:00 PM USD FOMC Economic Projections
Wed 06:00 PM USD Interest Rate Projections
Thu 06:05 PM CAD Bank of Canada’s Governor Tiff Macklem speech

What happened lately

In the United States, the key economic events set to occur are the Federal Funds Rate decision, FOMC Economic Projections, and Interest Rate Projections, all scheduled for Wednesday at 6:00 PM. These high-impact events could provide insights into the Federal Reserve’s stance on monetary policy and the outlook for the U.S. economy. Any changes or projections that differ from market expectations could prompt volatility in forex markets, particularly affecting currency pairs involving the US dollar.

In Canada, the focus will be on Thursday at 6:05 PM when Tiff Macklem, the Governor of the Bank of Canada, is scheduled to deliver a speech. Given its high-impact designation, Macklem’s speech could highlight the Bank’s monetary policy stance, economic assessments, or hints on future actions, which may influence investor sentiment and Canadian dollar movement. The speech is crucial for understanding the central bank’s approach to addressing economic challenges.

The potential impact on USDCAD primarily hinges on the outcomes of these economic events. If the Federal Reserve suggests a hawkish stance by either raising interest rates more than anticipated or laying out an aggressive monetary outlook, the US dollar could strengthen, potentially pushing the USDCAD pair higher. Conversely, a dovish tone could have the opposite effect, weakening the dollar and affecting the pair downward. Similarly, if Macklem’s speech conveys a strong economic outlook or hints at tightening monetary policy, the Canadian dollar may gain strength, causing the USDCAD to fall. Therefore, the consolidation observed in the USDCAD as it rose by a marginal 0.03% to 1.42910 on Tuesday reflects a market waiting for these significant economic developments to take place, with potential for increased volatility subsequently.

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What can we expect from USDCAD today?

USDCAD on Tuesday rose 0.03% to 1.42910. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks mixed as the pair is likely to consolidate above 1.42834 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.42999 or trades above daily pivot 1.42916. Break above could target R1 at 1.42993. While to the downside, we are looking at 1.42834 (S1) and daily low of 1.42840 as support levels. USDCAD need to break on either side to indicate a short-term bias. A break above 1.42999 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCAD is bearish as the pair posted lower by -0.52%.

Key levels to watch out:

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