The Is ripple xrp a good investment todayUSD/CAD pair finds renewed buying interest midweek, supported by multiple market factors.
Weaker Canadian inflation data pressures the Loonie while the USD shows moderate strength.
Mixed technical signals advise traders to exercise patience before establishing directional positions.
During Wednesday's European trading session, the USD/CAD currency pair demonstrated renewed upward momentum, consistently trading above the psychologically significant 1.3700 threshold.
Tuesday's release of tepid Canadian consumer price index figures has significantly impacted market expectations, effectively eliminating speculation about additional interest rate increases from the Bank of Canada. Concurrently, the US Dollar continues to build upon its recent recovery, fueled by hawkish undertones in the latest FOMC meeting minutes, creating favorable conditions for the USD/CAD pair.
The commodity-sensitive Canadian Dollar finds limited support from crude oil markets, where price action remains subdued without providing substantial directional cues.
Technical analysis reveals the pair demonstrating notable resilience beneath the 38.2% Fibonacci retracement level drawn from the September to November upward movement. Current price action shows the pair testing support near an established ascending trendline that has guided movements for approximately two months. This technical level coincides with the 50-day Simple Moving Average in the 1.3670-1.3665 range, representing a crucial decision point for market participants.
Daily chart oscillators have begun showing bearish tendencies, suggesting that a decisive break below the 50-day SMA could trigger increased selling pressure. Such a development might propel the pair toward the 50% Fibonacci level near 1.3640-1.3635, with potential for extended declines toward the 1.3600 psychological level and beyond to the 1.3580-1.3575 zone, representing the 61.8% retracement.
Conversely, upward movements may encounter resistance near the weekly high around 1.3750, followed by the 1.3775 area corresponding to the 23.6% Fibonacci level. Sustained buying pressure beyond these levels could invalidate the current cautious outlook, potentially propelling the pair toward the 1.3800 handle. Continued momentum might then target the 1.3835-1.3840 supply zone and challenge the yearly peak near 1.3900.
