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USDCAD, How far can we go?

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USDCAD / 1D

Hello traders, welcome back to another market breakdown.

Fundamentals:

Based on the last Testemonial from Powell:
1. Rates will go higher than previously expected
2. The Fed doesn't think they have overtightened and need to do more
3. They think they can sort out inflation without 'significant'
downturn (notice the abandonment of 'soft landing'
4. Unemployment needs to rise.
5. States the road of bringing down inflation will be 'bumpy'

Correlations:
US10Y is inverted for 245 days.
US03M is inverted for 132 days.
New rate hikes at the 1M, 3M, 6M and 2Y
EFFR @4.48%
RRP 2.168T, which has increased from 2.412T from the previous week

We need another 100bts to get to 5.5% Fud rates with probablity of 56%, so maybe +25/50bts in March, May and June.

Technical analysis: The USDCAD currency pair has been experiencing a bullish trend, with the price consistently breaking higher. Furthermore, on the monthly time frame, the price has rejected a major key level. In addition, the Dollar index DXY has also rejected a macro level, indicating further strength in the dollar. This, coupled with the US10Y bond market breaking its structure higher, makes it seem like a wise decision to invest in the dollar during its pullback phase.

The scenario I'm looking at:
Broken resistance becomes support.

For more in deepth on technical analysis check out this video