From a technical analysis standpoint, the 1.3550 level begins pretty significant support all the way down to 1.3450. However, this session could see fireworks.
USDCAD
The US dollar has been pretty noisy during the early part of the trading session on Wednesday as we have a central bank interest rate decision from both countries involved. The Canadians didn't say too much during the trading session and they didn't rock the boat. As we look further into the session, we have the Jerome Powell press conference.
The United States isn't expected to change its interest rates anytime soon. As a result, we probably have a couple of months of will he or won't he start talking the dollar down. We've seen a lot of negativities in the US dollar over the last 2 or 3 weeks, but this is a pair that has a lot of different things going on at the same time.
Support and Resistance Levels
While it doesn't directly affect this currency pair like it does many others, oil does have an influence on the Canadian dollar. From a technical analysis standpoint, the 1.3550 level begins pretty significant support all the way down to 1.3450. Depending on how hawkish or dovish Powell sounds later in the day could move this pair.
If we get a bounce, I wouldn't be surprised to see the US dollar hit the 1.3750 level. The area has been important multiple times, so we'll see if we get a selling opportunity there. If we turn around and break above there, then it opens up a much bigger move to the upside.
When I look at this, we're just testing the bottom of the overall range that we've been in for a huge part of the last couple of years. If you go back to the summer of 2022, we could drop all the way to 1.32 and still be in the same range. I think we're a little oversold, but a lot of this is going to come down to the reaction from the FOMC press conference. We'll probably have a clear direction by the end of the day. We are definitely at a place where I'd expect to see some support.
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