USD to CAD Prices Forecast: Canadian Dollar Navigates Global Rate Shifts

Highlights

• USD to CAD dips after recent peak; highest since June 1.
• Jackson Hole symposium eyed for rate clues post hike cycle.
• Powell’s address at Jackson Hole to determine U.S. yield trends.

USD/CAD Eyes Key Rates Amid Global Economic Shifts

The USD to CAD is lower early Monday after recently peaking at its highest since June 1 the previous session. Market enthusiasts are keenly focused on the Federal Reserve’s Jackson Hole symposium, seeking clues about potential interest rate trajectories post this hike cycle.

China’s Unexpected Monetary Policy Shift

China’s recent monetary policy changes have stirred discussions. In a surprising move, the nation slashed its one-year benchmark lending rate by 10 basis points, diverging from predictions of a 15 bp cut. Despite this, the yuan fell slightly, hovering around 7.3011, steering clear of last week’s deeper dips which drew state banks into buying action in global markets.

Jackson Hole to Influence Yields

The spotlight, however, remains on the upcoming Jackson Hole event. Jerome Powell’s address will be pivotal in dictating U.S. yield directions. Last week, the ten-year yields soared by 14 basis points, barely shy of a 15-year zenith. Meanwhile, thirty-year yields marked their highest in over a decade. The symposium’s theme, “structural shifts in the global economy,” hints at the possible end of prolonged low rates buoyed by minimal inflation. It also suggests a global inclination to sustain higher real rates, keeping the volatility of inflation at bay.

Canada’s Mixed Economic Signals Emerge

North of the border, Canada’s economic indicators brought mixed sentiments. While July’s Canadian Producer Prices rebounded by 0.4% after June’s slip, the nation’s investment and job data appear lackluster against its southern neighbor. This disparity provides longer-term support for the USD/CAD.

USD/CAD’s Bullish Short-Term Outlook

In the short-term, as global economic narratives unfold, the USD/CAD pair’s trajectory also looks bullish, influenced by both domestic data and international monetary maneuvers.

Technical Analysis

 

The USD to CAD’s current 4-hour price of 1.3526 sits above both the 200-4H moving average of 1.3307 and the 50-4H moving average of 1.3482, indicating an overall bullish sentiment. This position relative to the moving averages suggests sustained upward momentum. The 14-4H RSI at 52.57, slightly above the neutral mark, further corroborates this bullish inclination.

While the price is between the main support range of 1.3412 to 1.3372 and the main resistance range of 1.3612 to 1.3654, its position above both major moving averages is a strong bullish indicator. Thus, the current market sentiment for USD to CAD appears predominantly bullish, but vulnerable to a near-term correction.