USD/CAD: the decision of the US Federal Reserve disappointed investors 18 March 2021, 10:12

USD/CAD: the decision of the US Federal Reserve disappointed investors

18 March 2021, 10:12

Scenario
Timeframe	Weekly
Recommendation	SELL STOP
Entry Point	1.2362
Take Profit	1.2200
Stop Loss	1.2450
Key Levels	1.2200, 1.2362, 1.2440, 1.2610

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.2440
Take Profit	1.2610
Stop Loss	1.2350
Key Levels	1.2200, 1.2362, 1.2440, 1.2610

Current trend

The USD/CAD pair declines, trading at the level of 1.2395.

After yesterday's decision by the US Federal Reserve and the subsequent press conference, the USD Index fell by 0.6 points and is now trading around 91.450. The decision disappointed those who believed that the regulator would change the course of monetary policy. The interest rate remained at 0.25%, and in subsequent comments, the head of the department, Jerome Powell, made it clear that no adjustments were planned soon. Purchases of Treasury securities of $80 billion a month will continue, and mortgage-backed securities will be purchased for another $40 billion. As the official explained, the economy was a long way to reach employment and inflation targets, which would take a long time.

The USD/CAD pair falls, although Canadian macroeconomic data were worse than expected. The Core CPI for February rose by 0.3% MoM instead of the expected growth of 0.5% MoM. It was reflected in the annual rate, which rose only by 1.2% YoY against the expected 1.4% YoY. CPI for February added only 0.5% MoM, while growth by 0.7% MoM was forecasted.

Support and resistance

Locally, the price renews local lows. Technical indicators give a sell signal. Fast EMAs on the Alligator indicator are below the signal one, and the AO oscillator histogram is trading in the sell zone.

Resistance levels: 1.2440, 1.2610.

Support levels: 1.2362, 1.2200.

Trading tips

After decline or consolidation below the local support of 1.2362, sell positions with the target at 1.2200 are relevant. Stop loss – 1.2450. Implementation period: 7 days or more.

After reversal and growth or consolidation above the local resistance level of 1.2440, buy positions with the target at 1.2610 are relevant. Stop loss – 1.2350.