in 1.Above 3580, USD / CAD bulls continue to take hold; monetary policy divergence remains a key factor, with next week's Canadian inflation report and FED policy meeting expected to provide further guidance; continued decline in WTI crude oil is expected to be a stumbling block to the Canadian dollar's trend。

FED rate hike one yard more likely, USD / CAD bulls expected to continue to take power

On Tuesday, the USD / CAD continued to fall and try to launch a test toward the top of its range, which it breached last week.。However, the continued decline in WTI crude oil will drag down the Canadian dollar。For now, further USD / CAD upside looks to be the path of least resistance。It is worth noting that this week's market uncertainty and caution may continue to put pressure on the dollar.。

Overall, the fundamental backdrop remains positive for USD / CAD bulls。Even though there have been a lot of major events in the market recently, I'm still keen that the Fed (i.e., the Federal Reserve, the FED) will still announce a rate hike at its meeting next week。With the market having completely ruled out a two-yard (i.e., 50 basis point) rate hike, the question now is whether the FED will raise rates by one yard (i.e., 25 basis points) or not at all.。On Tuesday, Moody's also said its benchmark forecast is that the FED will continue to tighten monetary policy, which could exacerbate the challenges facing some U.S. banks.。

At the same time, the Bank of Canada (BOC) has indicated that they believe the current restrictive monetary policy stance has been sufficient to keep inflation down.。However, Bank of Canada Governor Macklem is also open to further rate hikes in case inflation rises again.。Recent job growth and a higher employment cost index have reignited fears that inflation could pick up again.。But this concern has not yet been confirmed, next Tuesday the market will usher in Canada's latest inflation data, when the data is expected to further clarify the Bank of Canada's future policy outlook.。

In terms of economic data, the market will also welcome some US data for the rest of the week, including retail sales (terror data) and producer price index (PPI), which will be released on Wednesday (March 15).。However, the most likely to have a significant impact on the USD / CAD trend is next Tuesday's Canadian inflation data。

USD / CAD trend technical forecast: find support, continue to be bullish

From a technical point of view, the USD / CAD is currently trying to retest the range that broke out last week, which has been constructed since November 2022.。USD / CAD Trend Daily Candle Chart Further progress was made after completing the Twilight Star Candle Chart pattern, but the exchange rate ended up at 1.Support was found near 3650 and a gentle rebound was launched.。