In the above video, I take a technical look at the USDCAD after the 50 bp cut yesterday. That move took the price higher and outside a key swing area, but could not sustain momentum. However, the decline today is trying to hold support at an earlier base level this week. That level will be key and I outline it in the above video.
USDCAD Technical Analysis
Rate Cut Aftermath
Yesterday, the Bank of Canada cut interest rates by 50 basis points. Initially, the USDCAD traded within a swing area between 1.38337 and 1.3847.
Post-Press Conference Rally
During the subsequent press conference, supported by USD buying, the pair surged toward the 1.38643 target. The intraday high reached 1.3862.
Current Price Action
The price has since retreated back into the swing area and below, reaching 1.3813, a level seen earlier this week.
Key Levels to Watch:
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Immediate support: 1.3813 (this week’s base)
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Next target zone: 1.3786-1.3792
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Critical resistance now: swing area (1.38337-1.3847)
Market Implications
A break below 1.3813 would:
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Increase selling pressure
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Target 1.3786-1.3792
Conversely, holding above 1.3813 would:
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Suggest the decline is temporary
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Maintain upside momentum
This article was written by Greg Michalowski at www.forexlive.com. Source