The Bank of Canada decided on Wednesday to keep interest rates unchanged, as expected, at 2.25%.
The USD/CAD pair declined to 1.3757 yesterday, marking its lowest level since September 17, 2025, and is currently trading near 1.3800. The pair has fallen by about 3% year-to-date. It has also dropped nearly 8% from its November 5, 2025, peak of 1.4141 to yesterday’s low of 1.3757.
Recent Canadian economic data shows resilience in the economy, with indicators pointing to the following:
• GDP for Q3 grew by 0.6%, higher than the previous reading of -0.5%.
• Employment change increased by 53.6 thousand jobs, exceeding expectations of -1.5 thousand.
• The unemployment rate fell to 6.5%, below expectations of 7.0% and the previous reading of 6.9%.
Meanwhile, the US dollar is under selling pressure against most major currencies. The US Dollar Index fell to 98.27 yesterday, its lowest level since October 17, 2025, and is down about 9% year-to-date, especially after the Federal Open Market Committee decided on Wednesday to cut interest rates by 25 basis points, as expected, bringing the target range down to 3.50%–3.75%.
Technical factors:
• The Relative Strength Index (RSI) is currently at 29, indicating oversold conditions and reflecting continued bearish momentum for the USD/CAD pair.
• The MACD indicator shows a bearish crossover between the blue line and the orange signal line, supporting further negative momentum.
Support and resistance levels:
• Support levels: If the pair breaks below the pivot point at 1.3784, it may target 1.3743, 1.3715, and 1.3674.
• Resistance levels: If the pair rises above the pivot point, it may target 1.3812, 1.3853, and 1.3881.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
