The USD/CAD currency pair faces a complicated backdrop due to factors such as crude oil prices, the Israel-Palestine war, and US data dynamics. The Canadian dollar is preparing for the release of US Producer Price Index (PPI) and Federal Open Market Committee (FOMC) minutes. The recent dovish comments by the Fed’s Logan have negatively impacted the USD despite increased demand for safe-haven currencies as a result of the conflict. Furthermore, the war in the Middle East has buoyed crude oil prices, benefiting the Canadian dollar. Building permit data from Canada is also expected to influence the USD/CAD exchange rate.
Looking at technical analysis, the USD/CAD daily chart suggests market hesitancy, with two doji candlesticks indicating indecision. The Relative Strength Index (RSI) reinforces this lack of bullish or bearish momentum. A confirmation close below the key support level of 1.3575 could trigger further downward movement in the pair. Resistance levels to watch include the 50-day and 200-day moving averages.
Retail traders are currently net short on USD/CAD, with 57% of traders holding short positions. This bearish sentiment can potentially impact asset prices. Overall, the USD/CAD exchange rate is influenced by various economic and geopolitical factors, making it important to closely monitor developments in the market.
