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USD/CAD Rallies Ahead of BoC Rate Decision, Dips Supported

Aayush Jindal

Aayush Jindal

Key Highlights

  • USD/CAD started a major increase above the 1.3650 resistance zone.
  • It broke a major contracting triangle with resistance near 1.3625 on the 4-hours chart.
  • GBP/USD resumed its decline and traded below 1.1920.
  • The BoC interest rate decision is scheduled today (forecast 4.5%, versus 4.5% previous).

 

USD/CAD Technical Analysis

The US Dollar started a major increase from the 1.3550 support against the Canadian Dollar. USD/CAD broke the 1.3600 zone to enter a bullish zone.

Looking at the 4-hours chart, the pair broke a major contracting triangle with resistance near 1.3625. There was a close above the 1.3650 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair even climbed above the 1.3750 level and is showing a lot of positive signs. An immediate resistance is near the 1.3780 level.

The next major resistance is near the 1.3800 level. A clear move above the 1.3800 resistance might start a steady increase towards the 1.3880 zone. Any more gains might send the pair towards 1.4000.

On the downside, an immediate support is near the 1.3720 level. The next major support is near the 1.3650 level, below which there is a risk of a move towards the 1.3600 level. Any more losses could open the doors for a drop towards 1.3550.

Looking at GBP/USD, there was a sharp decline below the 1.1920 support and the pair is now showing a lot of bearish signs.

Economic Releases

  • Euro Zone Gross Domestic Product for Q4 2022 (YoY) - Forecast 0%, versus 0.1% previous.
  • US ADP Employment Change for Feb 2023 - Forecast 200K, versus 106K previous.
  • BoC Interest Rate Decision – Forecast 4.5%, versus 4.5% previous.