Key Points
- The US dollar declined heavily recently against all major currencies, including the Canadian dollar.
- The USDCAD pair fell sharply and moved below a major support trend line on the hourly chart.
- The fed interest rate decision was announced, and the central bank kept rates at 0.5%.
- There was nothing in the press conference as well for the US Dollar buyers.
USDCAD Technical Analysis
The US Dollar had a bad day yesterday especially against the Canadian dollar. The USDCAD pair fell sharply and traded below the 1.3150 support area. Also during the recent downside move, the pair broke a major support trend line on the hourly chart.
The pair traded sharply lower, and currently testing the 1.3030-20 support.
If the pair corrects higher from the current levels, then the 23.6% Fib retracement level of the last drop from the 1.3242 high to 1.3030 low may act as a resistance area.
Fed Interest Rate Decision
One of the most anticipated events in the US passed. The fed interest rate decision was announced, and the central bank kept rates at 0.5%. When we analyze the statement regarding monetary policy, then there was nothing much for the US Dollar buyers. As a result, the greenback was under a bearish pressure.
The statement highlight was “Although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports.”
It looks like the US Dollar may remain under the bearish pressure, and might decline further against the Canadian dollar in the near term.
