Buying USDCAD due to possible correction with target of 1.44

On Tuesday, March 18, the USDCAD rate dynamics was rather limited, even though US stock indices fell and Canadian inflation exceeded market expectations. On Wednesday, March 19, the opening price stood at 1.43092.

Data released on Tuesday showed that Canada's Consumer Price Index (CPI) rose by 1.1% month-on-month in February compared to a projected increase of 0.6%. The surge was mainly driven by the expiration of tax credits and caused a temporary rise in prices. These data may prompt the Bank of Canada (BOC) to reconsider its plans to cut interest rates in April, providing CAD with moderate support.

That said, the CAD is under more pressure due to a slump in global oil prices, the country's key export commodity, in the face of an expected increase in global crude production.

Trade tensions also continue to affect global markets. According to the latest data from the Organization for Economic Cooperation and Development (OECD), growth forecasts for the United States and Canada were revised down to 2.2% and 0.7%, respectively. Canada's figures were changed more significantly with the economy previously expected to expand by 2%, while the US GDP was expected to expand by 2.4%.

Wall Street stock indices dropped on growing concerns about the impact of the US trade policy on the economy. Markets also emphasized deteriorating sentiment among consumers, with pessimism reaching the highest level since November 2022. These factors increase uncertainty and negatively affect the USD.

In the near future, markets will focus on the US Fed's interest rate decision, the meeting is scheduled for March 19. Analysts believe that the regulator is likely to keep the rate at the current level of 4.5%, continuing to assess the dynamics of economic indicators before taking further steps. The week will end with the release of Canada's retail sales data on March 21, which will be an important signal for assessing consumer activity and the state of the country's economy.

On the MACD chart for March 19 there are signs of a weaker bullish momentum. The indicator shows positive dynamics, suggesting that the buyers' activity in the market is still strong.

The chart of the Stochastic Oscillator shows the asset's proximity to the oversold zone. This may signal a potential for a correction. However, the general background does not yet indicate strong evidence of a sustained reversal.

The Macroeconomics indicator suggests selling.

Current recommendation:

Buy at the current price. Take profit — 1.44. Stop loss — 1.42.