USD/CAD extends downside movement after Yellen remarks

FXOpen

USD/CAD extended downside movement yesterday and closed around 1.1011 after Yellen remarks about tapering in asset purchase program.

The pair is being traded around 1.0987 at the time of writing; immediate hurdle can be seen near channel resistance which is currently at 1.1072. A break and daily close above channel resistance will accelerate the bullish momentum, hence exposing 1.1223 that is swing high of previous wave.

USD/CAD extends downside movement after Yellen remarks

On downside, the pair is expected to find huge support near 1.0861 i.e. a confluence of 55 Daily Moving Average (DMA) and 38.2% fib level. A break and close below 1.0861 support area shall target channel support that is currently near 1.0770, and then 1.0750 which is 50% fib level.

It is pertinent that Commodity Channel Index (CCI) is dipping below oversold zone with -134 reading on daily chart, a read below -100 signals oversold sentiment. Relative Strength Index (RSI) is however in neutral zone that means more downside movement is still possible. Negative divergence can also be noted with MACD on four-hour time frame which is always considered a very strong indication of downside risk.

Janet Yellen on Tuesday said that she would carry on her predecessor’s policy of gradual tapering in monthly asset purchase program. However, she looked concerned about labor market performance. “Although growth in the US picked up over a last few months, but recovery in employment sector is still very far from completion,” Yellen said. About recent non-farm payrolls report, new fed chairwoman said we have to assess the non-farm payrolls report patiently before jumping onto conclusions; policymakers will require concrete evidence to slow the pace of tapering in stimulus, she added. FOMC policymakers will gather on March 17-18, thus they will analyze both January and February job data before any decision about further tapering in asset purchase program worth $65 billion. 

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodities and European currencies Test Key Supports EUR/USD Analysis: The Price Today Has Set Its Minimum Since the Beginning of March Market Analysis: GBP/USD Dives While USD/CAD Gains Bullish Pace The US Currency Corrects After Recent Growth USD/JPY Price Analysis: Consolidation ahead of US News

Latest articles

Indices

Although UK-100 Index Is Near All-time Highs, UK Economy Slips into Recession

Technically, a national economic recession is defined as two consecutive quarters of contraction, and yesterday's Office for National Statistics data confirmed that this has happened — UK GDP fell in the third and fourth quarters of 2023 by 0.1% and

Cryptocurrencies

DOGE Price Increases by 170% in Less Than 2 Months

On February 1, 2024, the DOGE/USD rate was = 0.0783. On the last Friday of March, it rose to 0.2150. The rising price means Dogecoin is now the eighth-largest cryptocurrency in the world by market capitalization, overtaking Cardano

Commodities

Market Analysis: Gold Price and Crude Oil Price Gain Bullish Momentum

Gold price started a steady increase above the $2,200 resistance level. Crude oil prices are gaining bullish momentum and might rise toward $85.00.

Important Takeaways for Gold and Oil Prices Analysis Today

· Gold price started a decent increase

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.