FxNews—In October, the Canadian dollar fell to 1.391 against the U.S. dollar, marking its lowest point since October 2022 due to falling oil prices and cautious actions by the Bank of Canada.
The USD/CAD 4-hour price chart below demonstrates the price, support, and resistance levels.
Bank of Canada Cuts Rates
The potential for reduced tensions between Israel and Iran eased the risk premiums on oil futures, which negatively impacted expectations for Canadian foreign exchange earnings and weakened the Canadian dollar.
Regarding monetary policy, the Bank of Canada reduced its interest rate by 50 basis points during its recent session and indicated that additional reductions might be forthcoming. This move contrasts with the more stable policy stance of the U.S. Federal Reserve.
The decision came in response to a slowdown in inflation, which decreased to 1.6% in September—the first drop below the Bank’s 2% target in three years—and a rise in unemployment to 6.6%, its highest in two years, although it slightly improved to 6.5%.
USDCAD Technical Analysis – 29-October-2024
The currency pair trades bullish above the Ichimoku cloud and the 100-period simple moving average. The immediate support rests at $1.384, backed by the 50-period SMA. From a technical standpoint, the uptrend should resume, and the next bullish target seems to be 1.394, which is the August 5 high.
Please note that if USD/CAD falls below 1.384, the bullish scenario should be invalidated. In this scenario, a new consolidation phase that could extend to the 100-period SMA at 1.377 will likely emerge.
Next read: USD/CHF Poised to Break 0.87 as U.S. News Boosts Prospects
USDCAD Support and Resistance Levels – 29-October-2024
Traders and investors should closely monitor the key levels below to make informed decisions and adjust their strategies accordingly as market conditions shift.
- Support: 1.384 / 1.377
- Resistance: 1.394