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  • USD/CAD gained slightly after fluctuating in the 1.2750-1.2777 range.
  • DXY predicts a new wave of risk aversion.
  • Oil prices have not yet dictated the Canadian dollar bears.

The USD/CAD forecast remains bearish as we saw a significant fall in prices over the last two trading days. The pullback in the US dollar also contributed to it.

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As the USD/CAD pair oscillated between 1.2750 and 1.2777 on Friday, it showed a slight gain. However, as market participants increased risk appetite, the pair faced selling pressure around 1.2900 after dollar bulls lost momentum.

As investors await Canada’s unemployment rate and discrepancies in job numbers, the major funds are expected to trade back and forth in Tokyo and London. The unemployment rate is expected to drop to 6.2% from 6.5% so far. Compared to the previous print of -200.1k, the net change in employment is 160k.

The sharp drop in oil prices has not significantly affected the Canadian economy. Oil prices have fallen almost 18% on easing supply concerns in recent trading sessions, but USD/CAD has held up. The Canadian dollar is still not being dictated by oil.

As a result of the Russo-Ukrainian war, the dollar index closed at 98.50. Meanwhile, a stronger US CPI of 7.9% helped set the stage for the DXY to rally while awaiting geopolitical headlines.

Russian-Ukrainian wrestling headlines will affect the couple in the future. However, investors will also be watching the Michigan Consumer Sentiment Index due Friday.

USD/CAD price technical forecast: Weak bulls

The USD/CAD price broke below the 50-period SMA (4-hour chart). However, it found some buyers and gained back above the key mark. Still, the pair remains well below the 20-period SMA. It indicates a rangebound behavior in the market. It also shows that the market is waiting for a catalyst to determine a directional bias.

The volume bars show an increasing volume for the down wave while decreasing volume for the recent upside correction. Moreover, the immediate background of the widespread down bars and upthrust bars indicate selling pressure.

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USD/CAD forecast via daily open interest

The USD/CAD price dropped yesterday a great deal. Meanwhile, the open interest increased significantly. It indicates that fresh sellers have emerged in the market, and the pair may continue with the downtrend.

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