𝗧𝗵𝗲 𝗖𝗮𝗻𝗮𝗱𝗶𝗮𝗻 𝗱𝗼𝗹𝗹𝗮𝗿 𝗴𝗲𝘁𝘀 𝗽𝗼𝘄𝗲𝗿𝗳𝘂𝗹
Last week, the Bank of Canada raised the interest rate by 50 basis points to 1.5%. Policymakers hint at further rate hikes with a “neutral range” estimated at 2-3%. As a result, the Canadian dollar can strengthen against other currencies. The unstoppable rise in oil prices also pushes the Canadian dollar higher since these assets are strongly correlated. Also, Canada's economy showed a surge in trade with the rest of the world in March.
USDCAD broke below the 50-week moving average and retested April's low at 1.2540. Now it has a chance to break this level and target the next support at 1.2450. If the price breaks through the support, the downtrend for the USD will continue with the possible strong support at 1.2300. On the upside, the resistance level lies at 1.2660.
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