Canadian Dollar Forecast: USD/CAD Climbs to Fresh Yearly High
USD/CAD trades to a fresh yearly high (1.4200) as it retraces the decline following the Bank of Canada (BoC) meeting.
Share this:
Canada Dollar Outlook: USD/CAD
USD/CAD trades to a fresh yearly high (1.4200) as it retraces the decline following the Bank of Canada (BoC) meeting, and the exchange rate may track the positive slope in the 50-Day SMA (1.3926) as it holds above the moving average.
Canadian Dollar Forecast: USD/CAD Climbs to Fresh Yearly High
Keep in mind, USD/CAD snapped the recent series of higher highs and lows as the BoC warned that ‘we will be evaluating the need for further reductions in the policy rate one decision at a time’ after delivering a 50bp rate-cut at its last meeting for 2024.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
As a result, the reaction to the BoC rate decision kept the Relative Strength Index (RSI) out of overbought territory, but a move above 70 in the oscillator is likely to be accompanied by a further advance in USD/CAD like the price action from earlier this year.
With that said, USD/CAD may appreciate over the remainder of the week as it bounces back ahead of the weekly low (1.4094), but the RSI may show the bullish momentum abating should it continue to hold below 70.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Strategist; USD/CAD Price on TradingView
- USD/CAD extends the advance from the start of the week to register a fresh yearly high (1.4200), and the exchange rate may exhibit a bullish trend as it appears to be tracking the positive slope in the 50-Day SMA (1.3926).
- A break/close above 1.4210 (78.6% Fibonacci extension) raises the scope for a test of the April 2020 high (1.4299). with the next area of interest coming in around 1.4480 (100% Fibonacci extension).
- At the same time, lack of momentum to a break/close above 1.4210 (78.6% Fibonacci extension) may pull USD/CAD back towards the 1.4040 (23.6% Fibonacci retracement) to 1.4080 (78.6% Fibonacci extension) area, and the exchange rate may threaten the positive slope in the moving average if it fails to hold above the 1.3970 (61.8% Fibonacci extension) to 1.4000 (61.8% Fibonacci extension) zone.
Additional Market Outlooks
GBP/USD Outlook Hinges on Break of December Opening Range
Australian Dollar Forecast: AUD/USD Falls to Fresh Yearly Low
US Dollar Forecast: USD/JPY Rallies Ahead of US CPI Report
EUR/USD Monthly Opening Range Intact Ahead of ECB Rate Decision
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
DAX forecast: AI optimism offers relief ahead of central bank meetings
The DAX is finding some relief from the recent improvement in risk appetite, with investors becoming less concerned about the sustainability of the AI trade
Gold outlook: XAU/USD holds above key support ahead of FOMC
Gold forecast hangs in the balance as the metal is clinging to $4,000 ahead of the Fed, but higher oil prices and firm yields are making it hard for the metal to turn its rebound into a sustained rally. But can that change soon?
Silver Forecast: Is XAG/USD Finally Finding a Bottom
Silver is showing some encouraging signs after an initially weak start to the session. The metal dropped to a new year-to-date low below the $53 handle, reaching $52.60 before staging a sharp recovery.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.