The USD/CAD pair has been in a tight range this week as investors have focused on the soaring crude oil prices and the Bank of Canada decision. It is trading at 1.2693, where it has been in the past few days.
NFP data and Canada PMI data
The Bank of Canada concluded its two-day meeting on Wednesday this week and did what most analysts were expecting.
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The bank decided to start its lift-off by hiking interest rates by 0.25% to 0.50%. This was the first time that the bank lifted rates in years. And the officials hinted that more hikes were necessary to manage the current pace of inflation.
The USD/CAD pair has also held steady as investors assess the impact of the ongoing crisis in Ukraine. Last week, Russian forces invaded the country, where they are facing fierce resistance from the locals. As a result, they have started bombing residential areas in key cities.
The next key catalyst for the USDCAD price will be the upcoming US non-farm payrolls and Canadian PMI data scheduled for Friday.
Economists believe that the two countries added thousands of jobs in February as they started to wind down Covid restrictions. In the US, they expect that the economy added over 400k jobs in February after it added over 467k jobs in the previous month.
At the same time, they believe that the unemployment rate declined below 4% again while wage growth accelerated.
Meanwhile, economists polled by Reuters expect that the Canadian economy did well in February. The expectation is that the country’s PMI rose from 50.7 in January to 54 in February this year. A PMI reading above 50 is a sign that the economy is doing well.
USD/CAD forecast
On the daily chart, we see that the USD/CAD pair found a strong resistance at 1.2976 this year. It has struggled to move above this level several times before. It is now trading at 1.2700, where it has been in the past few days.
The pair is also trading at the same level as the 25-day and 50-day moving averages and is above the ascending trendline shown in blue. Therefore, the pair will likely remain unchanged after the American jobs data and Canadian PMIs.
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Source: https://invezz.com/news/2022/03/04/usd-cad-signal-ahead-of-us-nfp-and-canada-pmi-data/