USD/CAD Consolidating Ahead of Fed and BOC

Chart Analysis:

The USD/CAD pair remains in a well-defined consolidation zone (highlighted in beige) after its prior bullish rally. The range-bound price action reflects indecision, with traders waiting for a breakout to determine the next trend direction.

1️⃣ Consolidation Zone:

The pair is trading within a range between 1.4300 (support) and 1.4500 (resistance).
Multiple tests of both boundaries suggest these levels are pivotal for near-term price action.

2️⃣ Moving Averages:

50-day SMA (blue): Located at 1.4250, providing dynamic support near the lower boundary of the range.
200-day SMA (red): Positioned at 1.3835, signaling a long-term bullish bias.

3️⃣ Momentum Indicators:

RSI: At 55.57, in neutral territory, indicating a lack of strong momentum in either direction.
MACD: Trending slightly above zero but flat, reflecting subdued momentum.
What to Watch:

A break above 1.4500 would signal a resumption of the bullish trend, potentially targeting new highs.

Conversely, a break below 1.4300 could trigger a bearish correction toward the 50-day SMA and beyond.

Watch for sustained volume and momentum to confirm any breakout direction.

The USD/CAD pair is at a crossroads, with its consolidation phase setting the stage for a significant move. Traders should monitor the range boundaries closely for breakout opportunities.

-MW