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With Powell’s hawkish stance, the USD/CAD pair rises beyond the 1.3755 mark and is now approaching 1.3800 after trading at 4-month highs. The pair is trading at 1.3759 at the time of writing versus the previous closing at 1.3611 on Monday.
On the strength of Jerome Powell’s remarks, the USD/CAD immediately surged to new YTD highs at 1.3743. Inflation is rising, Powell continued, and depending on the data coming in, the Fed may tighten monetary conditions more quickly. As a result, the USD/CAD increased from about 1.3670. The current exchange rate for the USD/CAD is 1.3744.
The USD/CAD has increased its gains over 130 pip for the day, and bulls are aiming to target the high from November 3 that coincides with an ascending trendline that crosses near 1.3808. If the USD/CAD pierces the latter, a test of the 2022 high at 1.3977 would then be possible. Nevertheless, buyers must first recapture 1.3900 before moving on to the psychological 1.4000 level and the latter.
In a different scenario, the preceding YTD high at 1.3685 would serve as the first support for the USD/CAD, followed by the level of 1.3700 for a bearish continuation. Once passed, the daily low around 1.3550 on March 3 would act as the next support for the USD/CAD.
It should be noted that the Rate of Change (RoC) is aiming higher, and the Relative Strength Index (RSI) is in bullish territory, suggesting that bulls are in control.
