USDCAD reached a new low going back to February 24 | Forexlive

The USDCAD moved sharply lower this week despite comments from Bank of Canada’s Macklin yesterday that the central bank had made progress on inflation and that it was reasonable given the continued progress in reducing inflation for further rate cuts. Nevertheless, Macklem did emphasize that future rate cuts will depend on incoming data and its implications for inflation.

Since June, the BoC has reduced rates by 75 basis points to 4.25%, and markets are anticipating a 50 basis point cut in October, with an additional 25 basis point reduction expected in December.

The comments did little to support the USDCAD yesterday and momentum continued toward the next key target on the daily chart and the February and March 2024 lows between 1.3412 and 1.34194. The low price today reached 1.34189 between those two levels and has bounced higher. The current price is trading at 1.3446.

Looking at the hourly chart below, the price is back above the low price from the end of August at 1.34396. The next target level comes against swing lows from August 30 and September 6 at 1.3465. Yesterday, the price triedto bounce off those level but was not successful.

Getting above it, would have traders looking toward 1.3486 area (see green numbered circles) followed by the 38.2% retracement of the move down from last week’s high at 1.35059.

The falling 100-hour moving averages moving toward that retracement level. It is currently at 1.35186.

Did the low today finally give the buyers some confidence to move back to the upside?. If so, the targets need to be hit and approached and broken. Alternatively, a move back below close support at 1.34396, and the swing area off the daily chart down to 1.3412 would certainly disappoint, and likely lead to more selling.