USD/CAD climbs as BoC maintains status quo; risk-off sentiment lingers

USD/CAD remains positive in the day after piercing to fresh weekly highs.
USD/CAD rallies as safe-haven demand boosts US dollar amid economic concerns.
BoC’s minutes assure no rate cuts are expected in 2023 but leaves room for potential adjustments if necessary

Christian Borjon Valencia FXStreet

The USDCAD prints a fresh four-week high at 1.3651 after the Bank of Canada (BoC) revealed its latest monetary policy minutes, which were perceived as neutral. However, a risk-off impulse and falling oil prices undermined the Canadian Dollar (CAD), a tailwind for the USD/CAD. At the time of writing, the USD/CAD is trading at 1.3642.

USD/CAD climbs as sentiment deteriorates and falling oil prices undermine the CAD

Sentiment remains fragile, as shown by US equities. The latest Atlanta Fed GDPNOW, a model that estimates GDP in the US, came at 1.1%, vs. a prior’s estimate of 2.5%, for Q1 2023. The report flashed a slowdown in the US economy, sparking demand for safe-haven assets and underpinning the US Dollar (USD) to the detriment of the CAD. Additionally, oil prices, mainly WTI, is falling off the cliff at $74.24 per barrel, down 3.70%.

The latest minutes of the Bank of Canada (BoC) revealed discussions about hiking rates in April or waiting for more evidence. However, the Governing Council (GC) noted that inflation was declining, aligned with the BoC’s forecasts. Moreover, it signaled that no rate cuts are expected in 2023, and the bank will act if higher rates are needed.

Aside from this, the US economic docket revealed Durable Good Orders for March exceeded estimates and rose 3.2% MoM, above the last month’s reading. Excluding transportation, the so-called core Orders climbed 0.3%, above forecasts.

US Treasury bond yields were gaining ground and helped the greenback to bounce from two-week lows, reaching 101.013, according to the US Dollar Index (DXY). The DXY sits at 101.468, down 0.37%.

Therefore, the USD/CAD soared and hit a new two-day high at 1.3651, and as long as it persists above 1.3600, a test to 1.3700 is on the cards.

USD/CAD Key Technical Levels

USD/CAD

Overview
Today last price	1.3642
Today Daily Change	0.0015
Today Daily Change %	0.11
Today daily open	1.3627

Trends
Daily SMA20	1.3475
Daily SMA50	1.3576
Daily SMA100	1.3528
Daily SMA200	1.3418

Levels
Previous Daily High	1.3648
Previous Daily Low	1.3525
Previous Weekly High	1.3563
Previous Weekly Low	1.3343
Previous Monthly High	1.3862
Previous Monthly Low	1.3508
Daily Fibonacci 38.2%	1.3601
Daily Fibonacci 61.8%	1.3572
Daily Pivot Point S1	1.3552
Daily Pivot Point S2	1.3477
Daily Pivot Point S3	1.3429
Daily Pivot Point R1	1.3675
Daily Pivot Point R2	1.3723
Daily Pivot Point R3	1.3798

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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