USDCAD – Reversal Setup Ahead of FOMC Decision

3 Mei

USD/CAD has bounced off strong support near 1.3770, forming a clean bullish structure into a pivotal week dominated by the FOMC meeting. Price action shows higher lows and a tightening range, signaling a potential breakout. With the Fed expected to hold rates but maintain a hawkish tone, the USD may regain strength — especially against the CAD, which remains under pressure from trade risks and weak oil prices.

🔹 Technical Setup:
Structure: Rejection at 1.3770 support with ascending trendline developing.

Pattern: Bullish flag breakout (visible on 2H chart).

Momentum: Recovery candles suggest buyers regaining control ahead of resistance.

Key Levels:

Support: 1.3770 – 1.3780

Resistance:

TP1: 1.3852 (Fib 61.8%)

TP2: 1.3891 (swing high zone)

TP3: 1.3950 (major breakout target)

Invalidation: Below 1.3760

🧠 Fundamental View:
USD Outlook:
The Fed is widely expected to hold interest rates steady on May 7, but officials are pushing back against early rate-cut expectations. Chair Powell is likely to emphasize inflation risks and signal no imminent easing. This stance supports USD resilience, especially if the Fed reiterates “higher for longer” messaging.

CAD Outlook:
The Canadian economy continues to face export challenges from U.S. tariffs, weakening business sentiment. Meanwhile, softening oil prices reduce support for the CAD. With the Bank of Canada having already delivered several rate cuts, it remains more dovish than the Fed — creating a widening policy divergence.

💡 Trade Idea:
Bias: Bullish above 1.3780

Entry Zone: 1.3800–1.3820

Target 1: 1.3852

Target 2: 1.3891

Target 3: 1.3950

Stop Loss: Below 1.3760

📌 Watch for volatility during and after the FOMC statement and Powell’s press conference. A hawkish surprise could fuel a sharp move toward 1.39+.

8 Mei

Dagangan ditutup: sasaran tercapai

USDCAD +106 PIPS TP HIT.