#USDCAD @ 1.35476 The USD resumes its downward trend and returns below 1.3600. (Pivot Orderbook analysis)

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• The USD resumes its downward trend and returns below 1.3600.
• The Canadian dollar spiked down after the BoC’s “bearish hike”.
• USD/CAD seen at 136 by year-end despite BoJ slowing down – BofA.

The pair currently trades last at 1.35476.

The previous day high was 1.3748 while the previous day low was 1.3601. The daily 38.2% Fib levels comes at 1.3657, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3692, expected to provide resistance.

The US dollar resumed its bearish trend on Wednesday, retreating below 1.3600 after having spiked up to 1.3650 following the Bank of Canada’s bearish monetary policy decision earlier today.

The Bank of Canada announced a 50 basis point hike, instead of the 75 bp hike the market had anticipated, and pointed out to further monetary tightening ahead even If, as they reckon, the economy might be entering a slight recession over the coming quarters.

According to the statement, future hikes will be influenced by the bank’s assessment of “how tighter monetary policy is working to slow demand, how supply challenges are resolving and how inflation and inflation expectations are responding”

On the other hand, the US dollar remains vulnerable, as the market starts to assume a slowdown in the Federal Reserve’s monetary tightening cycle. Although a 75 bp hike in November is already priced in, the recent downbeat macroeconomic data in the US suggests that the bank’s sharp rate hike is damaging economic growth, which might add pressure to the bank to approve a 0.50% hike in December.

Currency analysts at Bank of America see the pair at 1.36 by year-end, despite BoC slowing down: “We expect the actual delivery of a BoC downshift to allow CAD rates to continue to outperform those of the US. USD/CAD appeared to be overbought in September due to the August inflation surprise and broad risk-off sentiment in the market. The latest inflation prints should provide some short-term tailwind for CAD ahead of the BoC meeting (…) We keep our year-end forecast at 1.36 for USD/CAD.”

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3551 at the time of writing. Pair opened at 1.3608 and is trading with a change of -0.42 % .

The pair is trading below its 20 Daily moving average @ 1.3717, above its 50 Daily moving average @ 1.3392 , above its 100 Daily moving average @ 1.3144 and above its 200 Daily moving average @ 1.2922

The previous day high was 1.3748 while the previous day low was 1.3601. The daily 38.2% Fib levels comes at 1.3657, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3692, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3557, 1.3506, 1.341
• Pivot resistance is noted at 1.3703, 1.3799, 1.385

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