Baxia Markets
May 02, 2024

USDCAD Faces Bearish Pressure Post Fed Announcement

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USDCAD experienced a downturn following the Federal Reserve's decision to maintain its interest rate at 5%, coupled with Fed Chair Powell's dismissal of further rate hikes speculation. Meanwhile, Bank of Canada (BoC) Governor Tiff Macklem hinted at potential interest rate cuts, citing declining inflation and public anticipation.

In economic analysis, forecasts for USD Initial Jobless Claims and Factory Orders indicated modest changes, while CAD Trade Balance was expected to decline. BoC Governor Macklem's remarks added to the market's anticipation of potential policy shifts in Canada.USDCAD Faces Bearish Pressure Post Fed Announcement

Technically, on the 1-hour chart, USDCAD retained a bullish stance with EMA 50 above EMA 200. However, the bullish sentiment faced challenges as the market tested EMA 200 for support, with EMA 50 inching closer towards a potential death cross. Bearish signals were reinforced by MACD's deep signal line below 0 and RSI's descent into bearish territory.

Critical support levels include the 61.8% retracement and 1.3643, within the value area of the volume profile. The outcome of today's CAD data could further impact the currency pair, potentially strengthening CAD against USD.


Key Takeaways:

  1. USDCAD declines post-Fed decision and BoC rate cut speculations.
  2. BoC Governor hints at interest rate reductions amidst economic concerns.
  3. Mixed economic forecasts for USD and CAD add to market uncertainty.
  4. Technical indicators show bearish signals, with potential for a death cross on the horizon.
  5. Critical support levels at 61.8% retracement and 1.3643 highlight key areas for USDCAD traders.

Key Economic Releases to Watch Today

USD, Initial Jobless Claims

Forecast 49.9 vs Previous 51.9

CAD, Trade Balance 

Forecast 1.10B vs Previous 1.39B

CAD, BoC Gov Macklem Speaks

USD, Factory Orders

Forecast 1.6% vs Previous 1.4%


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