USD/CAD Price Analysis: Trades inside Wednesday’s range ahead of Fed Powell’s speech

USD/CAD oscillates inside Wednesday’s range as investors await a speech from Fed Powell.
Jerome Powell might emphasize keeping interest rates higher for a longer period.
USD/CAD continues to move higher in a Rising Channel chart pattern.

Sagar Dua FXStreet

The USD/CAD pair trades back and forth in a narrow range near the crucial resistance of 1.3800 in the European session. The Loonie asset struggles for a direction as investors await the speech from Federal Reserve (Fed) Chair Jerome Powell.

The market participants hope that Jerome Powell would emphasize keeping interest rates higher for a longer period to keep pressure elevated on consumer inflation. Powell may quote rate cuts ‘unreasonable’ in the near term as current price pressures over 2% required inflation would be a hard nut to crack.

Meanwhile, the US Dollar Index (DXY) trades directionless near 105.50 despite deepening slowdown fears. The oil prices discover intermediate support after a sharp correction while more downside remains favored as Middle East conflicts are seen contained between Israel and Palestine only. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices impact the Canadian Dollar.

USD/CAD continues to move higher in a Rising Channel chart pattern in which each pullback is considered as a buying opportunity by the market participants. The 50-day Exponential Moving Average (EMA) at 1.3660 continues to provide support to the US Dollar bulls. Horizontal resistance is plotted from March 10 high at 1.3682.

The Relative Strength Index (RSI) (14) struggles to shift into the bullish range of 60.00-80.00. If the RSI (14) manages to do so, a bullish momentum would get triggered.

Going forward, a decisive break above October 27 high at 1.3880 would expose the round-level resistance at 1.3900, followed by 13 October 2022 high at 1.3978.

In an alternate scenario, a breakdown below October 24 low around 1.3660 would drag the asset to the round-level support of 1.3600. A further breakdown could expose the asset to October 7 low at 1.3570.

USD/CAD daily chart

USD/CAD

Overview
Today last price	1.379
Today Daily Change	-0.0006
Today Daily Change %	-0.04
Today daily open	1.3796

Trends
Daily SMA20	1.3745
Daily SMA50	1.3641
Daily SMA100	1.3486
Daily SMA200	1.3497

Levels
Previous Daily High	1.3814
Previous Daily Low	1.3755
Previous Weekly High	1.3899
Previous Weekly Low	1.3654
Previous Monthly High	1.3892
Previous Monthly Low	1.3562
Daily Fibonacci 38.2%	1.3792
Daily Fibonacci 61.8%	1.3778
Daily Pivot Point S1	1.3762
Daily Pivot Point S2	1.3729
Daily Pivot Point S3	1.3703
Daily Pivot Point R1	1.3822
Daily Pivot Point R2	1.3848
Daily Pivot Point R3	1.3882

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD pulls back from monthly high but holds above 0.7000

AUD/USD retreats from the monthly high set earlier this Thursday, sliding back to 0.7000 during the Asian session as a further escalation of tensions in the Middle East undermines the risk-sensitive Aussie. However, recent hawkish comments from RBA officials could support the Australian Dollar. Furthermore, the prevailing US Dollar selling bias, despite Fed hike bets and geopolitical uncertainties, could limit losses for the pair.

USD/JPY declines to a one-week low; eyes trading range support near 157.50 on weaker USD

USD/JPY drops to a one-week low during Thursday’s Asian session, with bears now awaiting a break below multi-week range support near mid-157.00s before placing fresh bets amid a broadly weaker US Dollar. Despite bets for a December Fed rate hike and Middle East jitters, the recent decline in US bond yields keeps USD depressed near a three-week low. Moreover, hawkish BoJ expectations and intervention risks underpin the Japanese Yen, further weighing on the currency pair.

Gold extends fall below $4,100 as Fed hike bets counter USD weakness

Gold weakens further below $4,100, hitting a fresh one-week low as oil-driven inflation risks reinforce Fed hike bets and weigh on the bullion heading into the European session. Meanwhile, falling US bond yields keep the US Dollar depressed near a three-week low despite geopolitical uncertainties. This, however, does little to support the non-yielding bullion, backing the case for further losses.

Dogecoin stays weak despite whales and new deal

Dogecoin price remains under pressure, trading below $0.081 despite a modest rebound earlier this week. Santiment data shows signs of accumulation, and Wednesday’s announcement of a Dogecoin Labs partnership with the Dogecoin Foundation adds a mildly bullish sentiment. Meanwhile, mixed derivatives metrics and weakening momentum indicators continue to limit the meme coin recovery.

Dow Jones Industrial Average climbs with the AI trade, led by a bank

The Dow Jones Industrial Average got most of its share of Wednesday's artificial intelligence (AI) rally from a bank and a bulldozer maker. The index closed near 52,800, its highest close since early September. SpaceX (SPCX) reported 161% revenue growth and the Nasdaq Composite rose more than 1%, but under price weighting the gains that counted most belonged to Goldman Sachs (GS) and Caterpillar (CAT).

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.