- The Loonie losses traction for the first time in the week though it keeps trading with gains.
- Russia-Ukraine tussles and Putin’s natural gas decree weighs on market mood.
- The US would tap 1 million barrels per day of their SPR reserves.
- USD/CAD Price Forecast: Unless the pair trades above 1.2613, where the 200-DMA lies, the trend is downwards.
The USD/CAD snaps two days of losses and recovers some ground amidst a stronger US dollar, continuing hostilities between Russia and Ukraine, and lower oil prices. The Canadian dollar weakens vs. the greenback on the back of those factors but remains flat in the week. At the time of writing, the USD/CAD is trading at 1.2486.
Downbeat market mood and falling oil prices weigh on the USD/CAD
Global equities keep trading in the red for the second straight day as Russia’s President Vladimir Putin signed a decree, which states that natural gas needs to be paid in Roubles beginning on April 1. Furthermore, Putin’s added that proceedings in euros or US dollars could also be blocked while emphasizing that Russia will supply gas at agreed-upon volumes and prices. However, he reiterated that active contracts will be halted if demands are not met.
As a reaction to the headline, market sentiment turned sour, with the S&P heading lower, as market players turned towards the safe-haven US dollar.
The US Dollar Index, a gauge of the greenback’s value vs. a basket of its rivals, advances 0.19%, sitting at 98.021, weighs on the Loonie, also dragged down by falling oil prices.
Western Texas Intermediate (WTI), the US crude oil benchmark, fell from daily highs to the $102 mark on an announcement that the White House would tap its oil reserves and release 1 million BPD over six month period.
Macroeconomic-wise, the Canadian docket featured the GDP for January, which rose by 0.2%, in line with estimations, and higher than December’s 2021 reading. On the US front, the Fed’s favorite gauge of inflation, the Core PCE for February, rose by 5.4% YoY, lower than the 5.5% estimated, while US Initial Jobless Claims for the week ending on March 26 increased by 202K, higher than the 197K expected.
USD/CAD Price Forecast: Technical outlook
The USD/CAD keeps trading downwards, as shown by the daily chart. Thursday’s price action reached a daily high at around 1.2533, but in the North American session, it gave back those gains and meandered around the 1.2480s highs. That said, the downtrend is intact unless the USD/CAD breaks above 1.2613, the 200-day moving average (DMA), and the top of the 1.2450-1.2600 range.
The USD/CAD first support would be March 25 daily low at 1.2465. A breach of the latter would expose January 12 low at 1.2447, followed by November 10, 2021, daily low at 1.2387.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.