Usdcad declines as markets anticipate Powell’s speech for economic insights

USDCAD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.54%	-74 Pips
Week to-date	-0.56%	-76 Pips
June	-0.01%	-2 Pips

Upcoming key events (London Time)

Tue 02:30 PM USD Federal Reserve Chair Jerome Powell speech

What happened lately

There are no significant new economic data releases from the United States or Canada that are poised to shift the markets drastically. However, the focus remains on the upcoming speech by Federal Reserve Chair Jerome Powell, expected to take place on Tuesday at 02:30 PM. This speech is a high-impact event as it may provide insights into the Fed’s outlook on monetary policy, interest rate adjustments, and economic projections for the near future. Given the importance of Powell’s remarks, investors and market participants will likely scrutinize any clues regarding potential changes in the economic strategy of the Federal Reserve, especially amid ongoing economic uncertainties.

Meanwhile, the USDCAD pair experienced a decline on Monday, dropping by -0.54% to settle at 1.36060. This marks a slight movement, with the pair ending June marginally lower by -0.01% or -2 pips. The absence of any groundbreaking economic data has led the USDCAD to largely follow ongoing market sentiment and external factors. Recent trends suggest the US dollar may be stabilizing after periods of volatility, which is reflected in its trading dynamics against the Canadian dollar.

The upcoming speech by Federal Reserve Chair Jerome Powell is likely to exert a significant influence on the direction of the USDCAD pair. Should Powell hint at potential interest rate hikes or ongoing tightening of monetary policy, the US dollar could experience upward momentum, thereby increasing the USDCAD pair value. Conversely, if Powell suggests a more dovish approach, signaling a pause or easing in rate hikes, the US dollar may come under pressure, leading to a potential decrease in the USDCAD exchange rate. Market participants should remain attuned to Powell’s language and any economic forecasts he provides, as these could set the tone for the USD’s performance against the CAD in the short term.

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What can we expect from USDCAD today?

USDCAD on Monday dropped -0.54% to 1.36060. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDCAD looks bearish as the pair posted lower in Monday trading session.

Looking ahead for the day, immediate support level is at S1 1.35675 with break below could see further selling pressure towards S2 at 1.35291. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.36994 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.35950 would indicate selling pressure.

For the week to-date, take note that USDCAD is bearish as the pair posted lower by -0.56%.

USDCAD ended month of June trading session down by -0.01% or -2 pips lower.

Key levels to watch out:

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