#USDCAD @ 1.34199 has expected to decline further to near 1.3400 as Fed sees a slowdown in the rate hike pace. (Pivot Orderbook analysis)

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• USD/CAD has expected to decline further to near 1.3400 as Fed sees a slowdown in the rate hike pace.
• S&P500 has displayed a juggernaut rally, portraying a stellar improvement in investors’ risk appetite.
• A significant jump in oil prices amid multiple tailwinds has strengthened the Canadian Dollar.

The pair currently trades last at 1.34199.

The previous day high was 1.3646 while the previous day low was 1.3409. The daily 38.2% Fib levels comes at 1.3555, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3499, expected to provide resistance.

The USD/CAD pair plunged to near 1.3430 in the early Asian session after the Federal Reserve (Fed) chair Jerome Powell delivered a less-hawkish commentary on interest rate guidance. The loonie asset has shown a vertical decline from above 1.3550 and is expected to deliver more losses toward the round-level support of 1.3300 amid sheer weakness in the US Dollar Index (DXY).

The USD Index has printed a fresh three-day low at 105.80 as Fed Chair has confirmed a deceleration in the rate hike pace from December monetary policy meeting. Less-hawkish commentary from Fed Chair is backed by a surprise decline in October’s inflation report. Also, a slowdown in economic activities and moderation in labor growth indicate that inflation will dwindle further in the coming months.

S&P500 has displayed a juggernaut rally, portraying a stellar improvement in investors’ risk appetite. The returns on US Treasury bonds have witnessed a bloodbath. The 10-year US Treasury yields have dropped to near 3.60%.

Apart from that, the catalyst that has led to a significant fall in the US Dollar is the weak United Stated Automatic Data Processing (ADP) Employment data. According to the ADP Employment, the US economy has added 127K fresh jobs in the labor market, lower than the expectations of 200K and the prior release of 239K. Evidence of a slowdown in employment generation is going to weigh immensely on the inflation rate ahead.

Meanwhile, the Canadian Dollar has got an adrenaline rush on solid gains in oil prices. Extreme drawdown in oil inventories reported by the US Energy Information Administration (EIA), Russia’s denial of providing oil at a novel price cap, and chances of sheer production cuts by OPEC+ have participated in strengthening oil prices.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.341 at the time of writing. Pair opened at 1.3587 and is trading with a change of -1.3 % .

The pair is trading below its 20 Daily moving average @ 1.3429, below its 50 Daily moving average @ 1.3578 , above its 100 Daily moving average @ 1.3282 and above its 200 Daily moving average @ 1.3019

The previous day high was 1.3646 while the previous day low was 1.3409. The daily 38.2% Fib levels comes at 1.3555, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3499, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3448, 1.331, 1.3211
• Pivot resistance is noted at 1.3685, 1.3784, 1.3922

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