The weekly forecast for the USD/CAD currency pair remains optimistic, fueled by the relentless strength of the US economy, as showcased in the latest data.
The Ups and Downs of the USD/CAD Currency Pair
After fluctuating throughout the week, the USD/CAD currency pair ended the week up, with the dollar closing on the front foot. As the week began, data revealed a bigger-than-expected drop in Canada’s inflation, leading to increased bets for a rate cut. As a result, the Canadian dollar weakened.Meanwhile, the dollar initially weakened after a dovish FOMC meeting where Powell maintained that inflation was declining. However, as the week ended, it recovered amid upbeat US economic data, allowing the USD/CAD duo to close on a bullish candle.
Next Week’s Key Events for USD/CAD
Next week, traders will get to assess GDP data from the US and Canada. Moreover, there will be a report from the US on durable goods orders. The GDP reports for both countries will have a big impact on the USD/CAD pair as they will reveal the impact of higher interest rates.Therefore, lower-than-expected readings could put pressure on the Fed and the Bank of Canada to cut interest rates. On the other hand, upbeat readings would allow the central banks to keep higher interest rates for longer. Meanwhile, the US durable goods orders report will show the state of manufacturing and consumer spending in the country. These will also show whether higher interest rates are having an impact on the economy. Therefore, the results will affect rate-cut bets.
USD/CAD Weekly Technical Forecast: Weak Bullish Momentum Faced 1.3600 Barrier
USD/CAD daily chartOn the technical side, the USD/CAD currency pair has traded in a shallow and tight bullish channel since mid-January. Although bulls have tried to make higher highs, the price appeared to be sticking close to the 22-SMA on Friday. At the same time, the RSI has stayed near 50 and has not touched the overbought region. This is a sign that although bulls have been in control, they may have weak momentum.The shallow, bullish move was facing strong resistance at the 1.3600 key level. Given the weak bullish momentum, the price might fail to break above. This would allow bears to take over by breaking out of the channel. If bears take control, the price would likely drop to the 1.3200 level.More By This Author:AUD/USD Weekly Forecast: Upbeat Data Ignites Dollar Strength
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