• USD/CAD extended its gains on Wednesday as oil prices declined on hopes of a ceasefire in the Middle East, while investors also assessed recent signs of weakness in the domestic economy.
• Markets have been volatile amid mixed signals from the White House, as Donald Trump pushes for de-escalation while the U.S. simultaneously deploys additional troops to the Middle East.
• Investors are hoping for an end to a war that has disrupted global energy supplies and risks fuelling inflation.
• Oil prices, meanwhile, eased on hopes that a potential ceasefire could restore flows through the Strait of Hormuz, a critical route for roughly a fifth of global energy supplies.
• A pullback in energy prices could relieve pressure on central banks, even as geopolitical risks continue to fuel inflation concerns. Traders expect the Bank of Canada to keep rates unchanged in April, while pricing in two rate hikes by year-end..
• Immediate resistance is located at 1.3839(38.2%fib), any close above will push the pair towards 1.3917(23.6%fib).
• Support is seen at 1.3759 (50%fib) and break below could take the pair towards 1.3706 (61.8%fib 0).
Recommendation: Good to buy around 1.3800, with stop loss of 1.3750 and target price of 1.3900


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