USD/CAD Price Forecast: Consolidates around 1.3700 as focus shifts to Fed-BoC policy
The USD/CAD pair trades in a tight range around 1.3700 during the European trading session on Tuesday. The Loonie pair consolidates as investors await monetary policy announcements by the Bank of Canada (BoC) and the Federal Reserve (Fed) on Wednesday.
Investors expect both central banks to leave interest rates at their current levels, with a warning that conflicts in the Middle East have prompted inflation risks to the upside.
According to the CME FedWatch tool, the Fed is unlikely to cut interest rates in any meeting before September. Even the odds of an interest rate cut in the September meeting have come down to almost 50% from 73% seen a week ago.
Surging oil prices amid energy supply disruption due to war in the Middle East have prompted gasoline prices in the US and major economies, potentially weighing on households’ purchasing power.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades flat slightly below 100.00. The USD Index has surrendered its early gains.
USD/CAD technical analysis
USD/CAD trades almost flat around 1.3700 as of writing. The pair holds a mild bullish bias as price stabilizes above the 20-day Exponential Moving Average (EMA), which has flattened and now tracks just below spot, signaling a recovering short-term trend after last week’s dip.
The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 zone for over six weeks, indicating a sideways trend.
Initial resistance emerges at 1.3715, where the recent swing high capped advances, followed by the March 3 high of 1.3750 as a more significant hurdle that would open the way toward the 1.3800 area if broken. On the downside, immediate support sits at the 20-day EMA near 1.3655, with a break exposing 1.3615 and then the 1.3580 region, where previous lows converge, and a deeper corrective phase would gain traction.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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