USD/CAD Daily Forecast – Canadian Dollar Is Flat As Bank Of Canada Holds Rate Steady

USD/CAD Video 10.03.21.

U.S. Dollar Remains Range-Bound Against Canadian Dollar

USD/CAD has recently made an attempt to settle below the support at 1.2625 but failed to develop sufficient downside momentum while the U.S. dollar remained mostly flat against a broad basket of currencies in a volatile trading session.

The U.S. Dollar Index found itself under pressure after U.S. reported that Core Inflation Rate increased by 1.3% year-over-year in February compared to analyst consensus which called for growth of 1.4%. The U.S. Dollar Index made an attempt to settle below the 92 level but received support near 91.80 and rebounded back above 92.

As a result, the U.S. Dollar Index remains in the range between the support at 92 and the resistance at 92.25. If the U.S. Dollar Index gets above the resistance at 92.25, it will head towards the next resistance at 92.50 which will be bullish for USD/CAD.

Meanwhile, the Bank of Canada left the interest rate unchanged at 0.25%. The Bank stated that it would keep the interest rate at current levels until it sustainably achieves its inflation target of 2%. According to the Bank’s forecast, this target will not be achieved until 2023. The Bank also noted that it will continue it quantitative easing program, which is not a surprise for foreign exchange market traders.

Technical Analysis

USD to CAD remains stuck in the range between the support at 1.2590 and the resistance at the 50 EMA at 1.2700. Recent trading sessions have shown that USD to CAD easily moves within this range.

However, USD to CAD failed to develop sufficient momentum to move out of the range. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

In case USD to CAD manages to settle above the 50 EMA, it will gain upside momentum and move towards the next resistance level which is located at 1.2750.

On the support side, a move below the support at 1.2590 will push USD to CAD towards the next support level at 1.2550.

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