March 18, 2022 8:20:53
The fall in market volatility and bid in global equities has helped CAD this week. The major is enjoying its fourth days of gains and much will depend on external developments and the Ukriane crisis for more outperformance. Firmer crude prices are also offering an added tailwind to the loonie.
The domestic economy has started the year on a strong note. Recent inflation data was higher than forecast and last week saw a stellar jobs report. Elevated price pressures especially should ensure that the BoC tracks the Fed moves in the coming months. In fact, they might well out-hike the US next year.
Technically, USD/CAD has tracked sideways for some weeks. The major pushed up above 1.28 last week into the 1.29 area. But the failure there has seen prices tumble this week.
The fourth day of CAD gains this morning has pushed prices into the 200-day SMA at 1.2603. This is the very bottom of the recent range with the March low at 1.2586. This support is key.
Lose this and sellers will target the year-to-date bottom around 1.2453. Initial resistance is at 1.2682/83 where both the 50-day and 100-day SMAs sit.
Although Moneta Markets aims to ensure that the information/material is accurate, it cannot be held responsible for any omissions/miscalculations or mistakes as it does not warrant the accuracy of such material. Any material and/or content provided herein is intended for educational purposes only and does not constitute investment advice on how clients should trade as it does not take into consideration your personal objectives, financial circumstances or needs. Please seek independent advice before making any trading decisions. Reliance on such material is solely at your own risk and Moneta Markets cannot be held responsible for any losses resulting directly or indirectly from such reliance. Any reference to figures/statistics or numbers refers to the group of companies of Moneta Markets. Please refer to the legeal documents should you require more information.
