FX.co ★ USD/CAD

The USD/CAD pair embarks on a testing path, navigating through slight losses while staying afloat above the crucial 1.3600 level as the early hours of Monday's Asian trading unfold. Meanwhile, the US Dollar Index (DXY), a dependable barometer for the USD's vigor against a basket of global currencies, stands resolutely above 106.20, scaling heights last witnessed in November. Fundamentals of the USD/CAD: The Federal Reserve (Fed), during its September meeting last week, opted to maintain interest rates within the 5.25% to 5.50% range. Yet, the collective expectation among most Fed members for further rate hikes later this year has captured the market's attention. Shedding light on this perspective, Minneapolis Federal Reserve Bank President Neel Kashkari conveyed his belief that another rate hike could be in the cards this year. Despite the optimism surrounding the US economic outlook, there's an undercurrent of uncertainty due to the consistent support for higher interest rates among Fed policymakers. While Minneapolis Fed Bank President Neel Kashkari acknowledges the possibility of upward interest rates, he also underscores the challenge of precisely predicting this trajectory. Fed Governor Kashkari has emphasized that the economy exhibits far greater strength than initially projected. H4 Time Frame Technical Outlook: The USD/CAD pair has continued its retracement, cascading from the heights around 1.3600, a level not seen for over a week. As the new trading week commences, this currency duo grapples with enduring selling pressure, marking the onset of a series of consecutive losses. This gradual descent has witnessed spot prices dipping beneath the psychologically weighty 1.3600 benchmark during the Asian trading session.

Technically, the USD/CAD pair is closely tethered to the 34-day Exponential Moving Average (EMA) on daily candles. The implications of this position are crucial, as the pair faces the risk of descending toward the 200-day Simple Moving Average (SMA), located slightly above the 1.3550 threshold. Despite the recent downturn, the pair maintains a resilient 3% ascent from the last swing low, which dipped into the 1.3500 handle.