The exchange rate between the US dollar and Canadian dollar, currently at 1.34716, continues to be unpredictable. It is fluctuating within the range of 1.3400 and 1.3450, as a result of the Federal Reserve’s choice to maintain interest rates at the same level.

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• USD/CAD remains volatile, trading between 1.3400 and 1.3450, following the Fed’s decision to keep rates unchanged.

The pair currently trades last at 1.34716.

The previous day high was 1.349 while the previous day low was 1.3379. The daily 38.2% Fib levels comes at 1.3422, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3448, expected to provide support.

The US Dollar (USD) erased its losses against the Canadian Dollar (CAD) after the Federal Reserve decided to keep rates unchanged but revise interest rate expectations for 2024. Nevertheless, the USD/CAD remains trading with slim gains and trades volatile at around 1.3400/1.3480 during the last hour.

As expected, the Fed kept rates at the current 5.25%-5.50% range, emphasizing that “Inflation remains elevated” while acknowledging that economic activity is expanding at a solid pace and the labor market remains strong. However, what moved the markets was that the Fed kept rates for 2023 at the same level as projected in June at 5.6% while revising 2024 from 4.6% to 5.1%, according to the Summary of Economic Projections (SEP).

In his press conference, Fed Chair Jerome Powell reiterated the Fed’s commitment to bring inflation toward its 2% target and added that keeping rates unchanged doesn’t mean the Fed has or hasn’t reached the stance of policy they’re seeking while stressing the US central bank is ready to raise rates further if appropriate.

In regards to high energy prices, he said that higher energy prices are significant and can affect inflation. He added that growth has been propelled by consumer spending, which consequently came stronger than expected, which justifies the need for higher rates.

USD/CAD reaction to the Fed’s decision

The USD/CAD reacted upwards to the Fed’s monetary policy statement but halted its advance at around 1.3440. Nevertheless, as shown by the hourly chart, the major resumed its uptrend and turned positive in the day, with buyers eyeing the 1.3450 mark, ahead of testing 1.3500.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3466 at the time of writing. Pair opened at 1.3448 and is trading with a change of 0.13 % .

The pair is trading below its 20 Daily moving average @ 1.3567, above its 50 Daily moving average @ 1.3423 , above its 100 Daily moving average @ 1.3401 and above its 200 Daily moving average @ 1.3464

The previous day high was 1.349 while the previous day low was 1.3379. The daily 38.2% Fib levels comes at 1.3422, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3448, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3388, 1.3328, 1.3277
• Pivot resistance is noted at 1.3499, 1.355, 1.361

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