USDCAD waiting for busy Wednesday
11 April 2023
In today's technical analysis, I would like to discuss the situation on the USDCAD who is getting closer to its main, long-term dynamic support. The price being there has the potential to trigger a promising trading opportunity in the mid-term.
Before we dig deeper into the technical aspect, let's review the fundamentals. Following the good Non-Farm Payroll (NFP) report from Friday, the odds of a rate hike in May in the US increased. This positive aspect for the USD has led to its strength in the past few days. On the Canadian front, an important day awaits as we will get their rate decision, along with a statement and a press conference tomorrow.
But wait, there's more! Wednesday will end with the FOMC meeting minutes. With all of this in mind, we can assume that the USDCAD will be the most affected pair by the macro calendar, and interesting times lie ahead.
Technically, at the beginning of the month, the price bounced off the long-term up-trend line (blue). In addition to that, the USDCAD confirmed a mid-term resistance level at 1.35 (orange). Currently, we are between those lines, i.e., in no man's land. From the price action point of view, the best way to trade this is to buy when the price closes a day above the orange area and sell when the price closes a day below the blue up-trend line. Wednesday's events should provide us with an answer.