CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

USD/CAD analysis: Currency Pair of the Week – March 4, 2024

Article By: ,  Market Analyst
March 4, 2024 12:30 PM
  • USD/CAD analysis: US dollar steady after Friday’s drop
  • BOC, Powell and NFP among macro highlights this week
  • USD/CAD technical analysis point to breakout

 

The USD/CAD faces a busy week, with lots of market-moving data from both sides of the border due for release throughout the week, culminating in the simultaneous publication of the February jobs report on Friday. We also have a rate decision from the Bank of Canada to look forward to in midweek.

 

USD/CAD analysis: US dollar steady after Friday’s drop

 

The US dollar has started the new week flattish, ahead of major events happening later in the week. Federal Reserve chair Jerome Powell will be testifying before Congress while in terms of data, the US non-farm payroll report on Friday will be the key focus. The greenback fell on Friday on the back of softer-than-expected manufacturing ISM data. However, the losses were limited amid growing bets the US would avoid a recession, and Federal Reserve officials insist that there is no rush to start cutting interest rates. Let’s see if this week’s upcoming data will change that view.

 

USD/CAD analysis: key data to watch this week

Here are the key data highlights to watch this week, relevant for the USD/CAD currency pair:

Among the macro highlights this week is the Bank of Canada’s rate decision. The North American central bank is expected to keep rates unchanged at 5%, with expectations very low that Governor Macklem will make any immediate tweaks to monetary policy. Instead, expect the BOC to offer insights into its economic outlook and future expectations.

 

Meanwhile, the highly anticipated US jobs report is likely to reignite volatility. Forecasts suggest a significant slowdown in job growth following last month's addition of over 350,000 jobs and a 0.6% month-on-month rise in average hourly earnings. A robust report could diminish the likelihood of a Federal Reserve rate cut in the first half of the year.

 

 

USD/CAD analysis: Technical levels and factors to watch

Source: TradingView.com

The USD/CAD has edged higher in the first months of the year, regaining December’s entire losses. Therefore, the momentum is with the bulls, albeit it has been a slow grind – and not just for the USD/CAD pair.

 

The USD/CAD has been printing higher highs and higher lows ever since it bottomed at 13177 in December. In the process, several resistance levels have broken down including the 200-day average at 1.3480 and the psychologically important 1.3500 handle. These levels are now among the support levels that the bulls will need to defend if they want to maintain the bullish trend.

 

More recently, the USD/CAD has started to chip away at resistance around the 1.3530-1.3550 area, which suggests that rates are gearing up for a potential breakout above the December high of 1.3620.

 

The line in the sand now is at 1.3440ish, which was the last low prior to the latest rally. A potential move below that level would invalidate the bullish trend for the USD/CAD.

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

 

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024