USD/CAD: BUY Signals in Uptrend Continuation For a LONG Setup

7 במרץ 2023

Hi there! This week is going to be important for the USD/CAD exchange rate, with several key events in the spotlight. The Bank of Canada Rate Decision, Nonfarm Payrolls, and Federal Reserve Chair Jerome Powell's testimony are all going to be closely watched.

So far, USD/CAD is up 0.11%, with a low of 1.3581 and a high of 1.3628. The Bank of Canada is expected to hold the overnight rate at 4.50% on Wednesday, and analysts think that the statement will note robust job growth but also acknowledge that inflation is still coming down.

Investors will be paying close attention to Powell's testimony and the jobs report to get a sense of how much the Federal Reserve will raise interest rates. The US Dollar index is down 0.2%, and there's a 76% chance of a 25 basis point increase at the Fed's meeting on March 22. Powell will likely indicate that more tightening is needed, but analysts expect him to be vague about the terminal rate. The Nonfarm Payrolls report is expected to show growth moderating to 220k, but leading indicators suggest that labor market conditions are still tight.

Overall, what Powell says and what the jobs report shows will be crucial for the direction of the US Dollar. The FOMC blackout period will begin on March 11, so the Fed still has the option to guide the markets after the jobs report.