General analysis USDCAD for 17.06.2022

Current dynamics

The USD/CAD pair gained some positive momentum for the second day in a row, after the pair fell following the Federal Open Market Committee's decision on Wednesday.
Although the Federal Reserve announced the largest interest rate hike since 1994 by 75 basis points to contain inflation. However, mounting concerns about the possibility of the US economy entering a recession, along with the statements of Federal Reserve Bank Governor Jerome Powell may be among the main reasons for the reaction the weak dollar after the decision was issued. The statements came to confirm the rejection of the possibility of increasing the interest rate by 100 basis points in the next meeting, as he indicated that the Fed is likely to discuss raising interest rates by 50 or 75 basis points in the next July meeting. 
As Jerome Powell stated in his press conference, it is clear that the increase of 75 basis points today is an unusually large increase and I do not expect movements of this size to be common. As he added, the preliminary readings for June were very attractive, we noted that, and the factors in our decision to go forward 75 basis points today is what we saw in the inflation expectations.
The economic forecasts of the US Federal Committee for the month of June showed that personal consumption expenditures inflation ends in 2022 at 5.2%, up from 4.3% in March, and ends in 2023 at 2.6%, and in 2024 at 2.2% and then returns to 2.0% in the long term. Besides, GDP growth is expected at 1.7% in 2022, down from 2.8% in its March forecast, which is the same as the expected rate of growth in 2022 and 1.9% in 2024, before growing after that at a long-term rate of 1.8%.  
Besides expectations of stable interest rates at 3.8% by the end of 2023, before declining to 3.4% by the end of 2024. The long-term expectations For interest rates has been raised to 2.5% from 2.4% in March.
While the rate hike was the highlight, came US retail sales, which were also announced on Wednesday. Monthly retail sales turned negative, declining to -0.3%, much worse than the previous forecast of 0.2%,
While the macroeconomic data on Thursday showed a decline in unemployment claims to 229 thousand from the previous estimated 232 thousand, but it came in violation of market expectations, estimated at 215 thousand, the Philadelphia Manufacturing Index decreased to -3.3 in June from 2.5 in May, where it was expected at 5.5.
Meanwhile, investors are awaiting today's speech from Federal Reserve Chairman Jerome Powell, which may guide investors beyond potential monetary policy action.

Support and resistance levels

On the 4 hour chart, the instrument is testing at the upper moving side of the Bollinger Bands. The indicator is directed towards a sideways trend, with the price range expanding, which gives clear buy signals. The momentum chart is above the 100 level, which gives sell signals. The Envelopes indicator gives buy signals. 

• Support levels: 1,29675, 1,29200, 1,28800.
• Resistance levels: 1,30150, 1,30800, 1,31425.

Trading scenarios

• Long positions should be opened at the 1,30150 with a target of 1.30800 and a stop loss at 1.29675. Implementation period: 1-3 days.
• Short positions can be opened at the level of 1,29675 with a target of 1.29200 and a stop-loss at the level of 1.30150. Implementation period: 1-3 days.