- The dollar recovered after US economic data pointed to a strong economy.
- Data on Thursday revealed a drop in initial jobless claims from last week.
- Inflation in Canada fell more than expected in February.
Friday’s USD/CAD price analysis points northward as the dollar rides high on positive US data. Meanwhile, the Canadian dollar is weaker after the BoC deputy governor’s comments regarding encouraging February inflation figures.
-Are you interested in learning about the Bitcoin price prediction? Click here for details-
The dollar recovered on Thursday and Friday after US economic data pointed to a strong economy. Consequently, short-term Treasury yields, which reflect interest rate expectations, rose. Notably, data on Thursday revealed a drop in initial jobless claims from last week. A decline in claims for unemployment benefits shows the unemployment rate fell, indicating a tight labor market.
Meanwhile, other data revealed a jump in sales of previously owned US homes in February. This is a sign that demand in the housing market, which drives the economy, rose. However, despite this economic resilience, the outlook for rate cuts held after Powell maintained that inflation was in a downtrend.
On the other hand, inflation in Canada fell more than expected in February, according to figures released on Tuesday. This is a sign that the Bank of Canada is slowly achieving its goal of lowering inflation. As a result, rate-cut bets have gone up, weakening the Canadian dollar.
Furthermore, Bank of Canada deputy governor Toni Gravelle noted the decline in inflation, saying it was encouraging. This indicates confidence that inflation is dropping, supporting a dovish stance.
The loonie was also weaker as oil prices fell on the likelihood of a ceasefire in the Gaza war. Such an outcome would reduce supply worries, making oil cheaper.
USD/CAD key events today
- Fed Chair Powell Speaks
USD/CAD technical price analysis: Battling between 1.3460 and 1.3600 levels
On the charts, USD/CAD is trapped in a range between the 1.3460 support and the 1.3600 resistance levels. Consequently, the price keeps chopping through the 30-SMA while the RSI chops through the pivotal 50 mark.
-Are you interested in learning about the forex signals telegram group? Click here for details-
Still, within the range, the bias is bullish as the price is above the 30-SMA with the RSI over 50. The bullish move came after the price retested the range support and failed to break below. The move will likely soon reach the range resistance at 1.3600, where it might pause, reverse, or break above. A break above would signal the start of a bullish trend.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
Saqib Iqbal
