March 26, 2023

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USD/CAD looks poised to extend downside momentum, sellers to eye 2018 lows

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USD/CAD keeps just below 1.2300 to start European morning trade

USD/CAD D1 29-04

The pair extended its downside push yesterday, capitalising on the central bank divergence theme as the dollar tumbled across the board as well.

The Fed kept a more dovish stance and with the BOC starting to taper, it continues to drive further interest in the loonie – not to mention booming commodity prices.

As things stand, the break lower this week now sees USD/CAD look to target the lows seen in late-January to early-February @ 1.2247-56. A firm break below that will shift the focus towards support from the 2017 low next @ 1.2055.

A look at the monthly chart spells out the more evident push lower in the pair since peaking in March last year:

USD/CAD M1 29-04

Of note, sellers look set to seal a break below the 100-month moving average (red line) for the first time since 2013.

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