Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
USD/CAD Rangebound as Hawkish Fed Rhetoric Fails to Convince US Dollar Bulls

USD/CAD Rangebound as Hawkish Fed Rhetoric Fails to Convince US Dollar Bulls

Zain Vawda, Analyst

Key Points:

USD Forecast
USD Forecast
Recommended by Zain Vawda
Get Your Free USD Forecast
Get My Guide


The Canadian Dollar continues to display resilience against the greenback in the face of hawkish comments from US Federal Reserve policymakers as dollar bulls remain cautious. The upside rally following the Fed comments failed at around the 1.3400 level before declining 100-pips heading into the European session.

Yesterday’s rally higher for the pair was sparked by comments from Federal Reserve policymakers, with James Bullard’s comments the most notable. The St. Louis Fed President stated that interest rates need to climb to at least 5-5.25% to see a notable impact on inflation while warning of further financial stress in the months ahead. Bullard is the latest Fed policymaker to follow a hawkish rhetoric this week, yet the dollar remains uninspired thus far. Economic data releases from the US seemed to support the view of policymakers as weekly jobless claims beat estimates yesterday confirming the strength of the labor market.

For all market-moving economic releases and events, see the DailyFX Calendar

Traits of Successful Traders
Traits of Successful Traders
Recommended by Zain Vawda
Traits of Successful Traders
Get My Guide

The Canadian Dollars resilience is somewhat surprising given the decline in WTI prices this week. The strength of the Loonie could be attributed to rising peak rate expectations following the Canadian CPI data released earlier in the week. The CPI print came in at 6.9% in line with expectations, however inflation seems to be seeping into a wider variety of sectors which is a cause for concern. This continued spread of inflationary pressure across sectors is likely to keep further rate hikes by the Bank of Canada on track with the peak rate expectation remaining around 4.25%. Markets are still pricing in a 50% probability of a 50bp hike at the Bank of Canadas upcoming meeting on December 7.

12-month change in the Consumer Price Index (CPI) and CPI excluding food and energy

Chart, histogram  Description automatically generated

Source: Statistics Canada

USD/CAD D Chart, November 18, 2022

Chart, histogram  Description automatically generated

Source: TradingView, Prepared by Zain Vawda

USD/CAD has struggled to sustain any meaningful push higher as evidenced by yesterday’s daily candle close. The huge wick to the upside is indicative of the selling pressure still evident in the pair.

Given the significant support around the 1.32500 (previous channel breakout) and the 100-day MA an upside push cannot be ruled out. Any such move would require a return of dollar bulls which at this stage remains elusive. A break below this key support area could see a retest of the 200-day MA around the 1.30000 Psychological level.

The pair still remains on course to snap a four-week losing streak with a bullish candle close on the weekly timeframe which could result in a push higher as we start the new week.

USD/CAD Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -28% 27% -1%
Weekly -24% -5% -13%
What does it mean for price action?
Get My Guide

Resources For Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicators for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

--- Written by Zain Vawda for

Contact and follow Zain on Twitter: @zvawda

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.