USD/CAD Price Prediction – USD/CAD Continues Gains Upward Traction amid Falling Oil Prices and Stronger Dollar

Key Insights

• Gold prices fell as the dollar rose. 
• Treasury yields climb to the highest levels since 2018.
• Oil prices tumbled amid stronger dollar and demand concerns in China. 

USD/CAD maintains positive momentum as a stronger dollar acts as a tailwind for the currency pair. The dollar moved higher against other major currencies.

Benchmark yields surged amid concerns of rising inflation and declining economic growth. The ten-year treasury yield rallied to 3.185% in the wake of the Fed tightening rates. 

Gold prices moved lower as the dollar strengthens. Oil prices tumbled due to a stronger dollar and demand concerns amid China’s lockdowns. A pledge by the G7 nations to ban or phase out Russian oil followed the EU’s proposal for phased sanctions on Russian oil.

US wholesale inventories increased by 2.3% in March compared to the previous month, which was in line with economists’ expectations. Wholesale inventories increased 22% year-over-year. Inventories are a part of gross domestic product and go into the GDP calculation. 

Inflation data that will be released on Wednesday will likely signal the size of the Fed’s next move. 

Technical Analysis

The USD/CAD sustains positive momentum, hitting a year-to-date high of 1.296. The pair is having a bullish break out as it pushes toward the key 1.30 level. Investors might see a pullback as an opportunity to buy the dip. 

 Resistance is seen near the key level of 1.30. Support is seen near the 10-day moving average of 1.284. A pullback to the 10-day moving average is an opportunity for investors to buy the dip.

Short-term momentum turns negative as the fast stochastic might have a crossover sell signal. Medium-term momentum is positive as the MACD line generated a crossover buy signal.

This scenario happens when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day MA of the MACD line). The trajectory of the MACD is in positive territory, which reflects an upward trend in price movement.