Detailed FX Market Outlook and Analysis

USD/CAD Daily Analysis 13-April-2023

USD/CAD Daily Analysis

The short-term outlook for USD/CAD has shifted to a bearish bias, following the break below the 1.3405 support level. The decline from 1.3860 is expected to continue, possibly extending towards the 1.3224/61 support area. Given that this downturn is perceived as the third phase of a correction originating from 1.3976, significant support around 1.3224/61 could trigger a rebound. A break above 1.3552 would shift the bias back towards the upside, targeting the 1.3860 resistance.

In a broader context, the uptrend from the 2021 low at 1.2005 is still ongoing. A break above 1.3976 would confirm the trend’s resumption, aiming for the 61.8% projection of 1.2401 to 1.3976 from 1.3261 at 1.4234. A solid break above this level could set the stage for a rally towards the long-term resistance zone between 1.4667 and 1.4689, which includes the 2016 and 2020 highs. To validate a medium-term peak, a sustained break below the 55-week EMA (currently at 1.3282) is necessary. Otherwise, the outlook will remain bullish, even if a substantial pullback occurs.

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