USDCAD takes a step lower after a sharp run higher loses some steam

The USD is tilting more to the downside today helped by the initial jobless claims Jobless Claims Jobless claims are a weekly statistic reported in the United States that represents a key barometer for domestic employment. As one of the most closely watched US indicators, jobless claims carry a lot of weight in financial markets, namely forex and the stock market.Jobless claims are reported on a weekly basis by the Department of Labor. While painting a picture of the overall health of the economy, jobless claims can be broken down into two types.This includes initial jobless claims or person Jobless claims are a weekly statistic reported in the United States that represents a key barometer for domestic employment. As one of the most closely watched US indicators, jobless claims carry a lot of weight in financial markets, namely forex and the stock market.Jobless claims are reported on a weekly basis by the Department of Labor. While painting a picture of the overall health of the economy, jobless claims can be broken down into two types.This includes initial jobless claims or person Read this Term which pushed back above the 200K level at 211K. That broke a string of seven consecutive weeks below the 200K level.

The forward-looking market is starting(?) to ignore the more hawkish comments from the Fed The Fed "The Fed" is a short-hand that refers to the Federal Reserve or Federal Reserve System, the central banking system of the United States. Traders often discuss the actions of the Fed, primarily interest rate decisions, as they significantly impact all financial markets.The Fed shouldn't be confused or substituted with the term "the Feds" and doing so tells everyone you're a total noob. The term "the Feds" refers to US Federal law enforcement, including such agencies as the FBI (Federal Bureau of "The Fed" is a short-hand that refers to the Federal Reserve or Federal Reserve System, the central banking system of the United States. Traders often discuss the actions of the Fed, primarily interest rate decisions, as they significantly impact all financial markets.The Fed shouldn't be confused or substituted with the term "the Feds" and doing so tells everyone you're a total noob. The term "the Feds" refers to US Federal law enforcement, including such agencies as the FBI (Federal Bureau of Read this Term chair this week, and now beginning to wonder...has the market gone too far?

The two year yield is down -7.4 basis points and dipping back below the 5.0% level at 4.992%. The 10 year yield is down -1.2 basis points 3.96%. The 10 year has been more reluctant to move to the upside with the 2-10 year spread getting more more negative in the process.

For the USDCAD, it is now breaking to a new day low at 1.3767. This week the BOC kept rates unchanged (yesterday). The USDCAD moved up to a new cycle high of 1.38165. That took the price to the highest level since October 21, 2022. The price has moved up 263 pips in a little over four trading days. In 17 trading days the price is up around 545 pips (from the low on February 14). There is some room for a corrective move. The market is a bit overbought.

Looking at the hourly chart, the price has now dipped below the swing high from yesterday's Asian trading at 1.37735. That represents a step in the downward direction. The swing low from yesterday at 1.37433 is the next target. Below that the 38.2% retracement of the move up from last week's low comes in at 1.37163.

Drilling down to the 5 minute chart, recall from yesterday the price action into the Bank of Canada decision was centered mostly between 1.3743 and 1.3772. The price moved above that area after the Bank of Canada decision, and that helped to extend the price toward the highs.

In trading yesterday and today, the 1.38139 – 1.38162 area stalled the rally. There is a discernible ceiling.

For sellers looking for more downside corrective action, watch the 1.3788 level as a risk/bias defining level in the short-term. That level was a corrective low into the close yesterday and also a low price in the early European session today. I would think if the sellers want to push lower, staying below that level would give them more confidence. A move above would not look so great.