In the daily USDCAD chart below, we can see that the pair sold off after breaking through the key support level of 1.3664, largely aided by rising oil prices. yesterday, Gap up oil On the heels of a surprise cut by OPEC+ on Sunday.
The Federal Reserve (Fed) is expected to end its hiking cycle at its May meeting without terrible economic data, and with the market trading on interest rate expectations at the moment, the U.S. I’m under pressure. Only very ugly economic data can help the US dollar at this point as the market switches from interest rate trading to recession trading and calls for the US dollar as a safe haven.
In the 4-hour chart below, we can see that the downtrend is well maintained. Moving averages act as resistance and buyers want to wait for an upward crossing of the moving averages to confirm a change in trend. We also got very weak ISM manufacturing PMI data yesterday. This could be an early sign that economic data is about to head south again after his January and his February rally. It could also be a sign that recent bank troubles may have actually caused some pain.
In the 1-hour chart below, we can see that the price has started trading inside the channel after breaking the support. Sellers may rely on channel caps and Fibonacci retracement levels in the event of a pullback. On the other hand, buyers want to see an upward breakout before building up and are targeting his 1.3664 which has turned from previous support to resistance. Tomorrow we have his PMI for his ISM service and we might see the market trade a recession even if it falls.
