- USD/CAD trades near the area of 1.4000 after reflection from mid -1.38s at the beginning of this week.
- Soft Canadian inflation and warnings of Powell pressure on the perspectives of the Canadian dollar.
- The key resistance is 1.4060; Despite the recent reflection of the Bear, the technical background.
USD/CAD floated on Tuesday near the 1.4000 zone, consolidating after recovering from earlier falls around the region 1.3850. The Canadian dollar did not gain adhesion despite the cooler than the expected inflation report from March, while traders are preparing a decision on the policy of Bank Canada. Meanwhile, the American dollar tried to mildly reflect after days of losses related to ongoing commercial tensions with China.
In March, the Canada inflation rate slowed down to 2.3% per year, below expectations that is 2.6% earlier. Month of the month, CPI increased only 0.3%, there is a lack of forecast by 0.7%. Data slightly alleviated market expectations that BOC will keep the rates of 2.75% in the first political meeting from June. Markets will carefully view the tons of the Governor of Macklem, especially when uncertainty is growing as to how Trump’s aggressive tariff policy can wave in Canada’s economic perspectives.
On the US side, Greenback is in the face of lasting pressure from global investors, because Trump’s tariff escalation is still undermining confidence. According to Commerzbank analysts, the complexity and unpredictability of the current trade policy in the US enhance the risk of inflation, while damaging trust among global trading partners. Fed President Powell repeated these fears, warning that the inflationary effects of tariffs can be stronger and longer than initially expected. He added that it is too early to determine the right path for interest rates and that the Fed is not in a hurry with action.
Technically, USD/CAD generally shows bear signals, even with a compact profit during the day. The couple trade in the upper part of their daily coverage between 1.3850 and 1.3980. The relative force indicator is located nearly 37 on a neutral territory, while MacD prints a sales signal. Despite some mixed signals from the shoot indicators, the average movable strengthens the perspective: 20-, 100- and 200-day SMA, along with 10-day EMA, all suggest further weakness forward. The support is due to 1.3827, while the resistance levels are at the level of 1.4002, 1.4060 and 1.4063.
