Currency pair US Dollar to Canadian Dollar USD/CAD continues to move as part of the fall and the formation of the “Triangle” model. At the time of publication of the forecast, the US Dollar to the Canadian Dollar is 1.3389. Moving averages indicate the presence of a short-term bearish trend for the pair. Prices have broken through the area between the signal lines down, which indicates pressure from buyers and a potential continuation of the price pair growth in the near future. At the moment, it is worth considering an attempt to develop a price correction and a test of the resistance level near the area of 1.3425. Further, a rebound down and the continuation of the fall of the currency pair on Forex. The potential target of such movement of the instrument is the area below the level of 1.3175.
Canadian Dollar Forecast January 27, 2023
An additional signal in favor of falling quotes of the Canadian Dollar will be a test of the resistance line on the relative strength index (RSI). The second signal in favor of the decline will be a rebound from the lower boundary of the bullish channel, which was broken down by the sellers. Cancellation of the option of falling the USD/CAD currency pair on Forex will be a strong growth and a breakdown of the 1.3535 area. This will indicate a breakdown of the resistance area and continued growth of quotes to the area above the level of 1.3765. It is worth waiting for confirmation of the fall of the pair with a breakdown of the support area and closing of the quotes of the USD/CAD pair below the level of 1.3275, which will indicate a breakdown of the lower border of the “Triangle” model and the beginning of the pattern with targets at the bottom.
As expected, the Bank of Canada raised the rate by 25 basis points to 4.5%, most likely the last rate increase if economic performance does not go beyond the CBR’s expectations. In general, pressure on consumers and producers remains in the country due to higher inflation, food and housing prices will continue to rise, even despite the fall in inflation from 8.1% to 6.3% in December due to lower gasoline prices. Short-term inflation expectations remain high, it may only come down towards the end of the year. According to the Bank of Canada, the country’s economy grew by 3.6% last year, but most likely there will be a strong slowdown in mid-2023. After that, we can again expect a new round of recovery.
Canadian Dollar Forecast January 27, 2023 suggests an attempt to test the resistance area near the level of 1.3425. Further, the continuation of the fall to the area below the level of 1.3175. An additional signal in favor of a decrease in the Canadian Dollar at Forex will be a test of the trend line on the relative strength index (RSI). Cancellation of the option of falling USD/CAD quotes will be a strong growth and a breakdown of the level of 1.3535. This will indicate a continued rise in the value of the asset with a potential target above the level of 1.3765.
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