Following the dip in crude oil prices on the day, the USD/CAD has retained upside momentum ahead of the FOMC minutes. Furthermore, trade balance data from Canada showed a larger-than-expected narrowing of the February 2021 trade surplus, Trade surplus registered at C$1.0 billion, which was less than the C$1.3 billion that the markets expected. It was also less than the previous month’s figure of C$1.2 billion.
The combination of lower crude oil prices and the downbeat trade balance data served to put the Loonie under pressure on the day, allowing the USD/CAD to add 0.40% to its value on the day. This extends the winning streak on the pair to 2 days, allowing the pair to recover most of last week’s losses.
Technical Outlook for the USD/CAD
The pair is now challenging the 1.26219 resistance level, with an intraday violation of this barrier that presently lacks additional bullish momentum. Bulls would be looking to FOMC minutes that would be USD-positive for another attempt at breaking down this cap, with 1.26647 and 1.27000 (16 February and 2 March lows) lining up as additional targets to the north. This move would also break past the channel’s trendline and allow for further recovery of the pair towards 1-month highs.
On the flip side, failure to break past the channel’s upper border at the 1.26219 price resistance level would allow the pair to target 1.25862, with a further decline towards the opposing channel border also aiming to break below 1.25323 and 1.24790 along the way. Other targets are seen at 1.24489 and 1.23998.
USD/CAD Daily Chart