Our free forex signals service today looks at the USD/CAD pair and we have the entry, stop and take profits levels for you.
The Canadian Dollar paired with its American namesake this week to reach 1.2807, a multi-month high. The last time the pair was seen in the 1.28 area by the end of January this year. Although traders retreated from the highs on the same day, the upside USD/CAD trend still has not lost its relevance.
Considering the results of the last meeting of the Canadian central bank, it can be assumed that the probable non-correlation of the positions of the FRS and the Bank of Canada will support the buyers of the pair.
Therefore, it is reasonable to consider the southern corrective movement in prices as a reason for opening longs. But, by and large, the Canadian Dollar has finally lost the trump card that it has been using for many months.
Back at its April meeting, the Bank of Canada reduced the volume of the asset repurchase program by 1 billion. At that time, the US Federal Reserve took an unequivocally dovish position since American inflation did not yet cause concern. Therefore, throughout April and most of May, the Canadian Dollar had a significant advantage against the US dollar.
Everything changed at the beginning of the summer, after the announcement of the results of the June Fed meeting. The Fed has stepped up its rhetoric and released an updated point forecast that the interest rate will be raised twice in 2023.
But given the spasmodic growth of American inflation, there is an opinion in the market that the Fed will begin tightening monetary policy as early as next year. In contrast, by the end of this year, it will announce that QE will be phased out (according to some assumptions, Powell will make a corresponding statement in August at the economic symposium in Jackson Hole). Against the backdrop of such hawkish expectations, the Canadian Dollar is forced to follow its peer from the US, defining the upside trend of USD/CAD.
USD/CAD free forex signals
Instrument: USD/CAD
Order: BUY STOP
Entry price: 1.2616
Stop Loss: 1.2520
TP1: 1.2759
Recommended Risk: 1%
Risk / Reward Ratio: 1:1.5
Signal validity period: Good until cancelled
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Saqib Iqbal
