USD/CAD Nears Three-Month Low as US Dollar Bears Take Control

USD/CAD Nears Three-Month Low as US Dollar Bears Take Control

The USD/CAD pair is facing sustained selling pressure for the third consecutive day, reaching a near three-month low during the early European session. Trading around the 1.3385 area, down 0.15% for the day, the pair appears vulnerable to further downside as the US Dollar (USD) succumbs to bearish sentiment.

As of the current moment, the price hovers around 1.3375, indicating a potential for additional bearish momentum.

The USD Index (DXY), which gauges the Greenback against a basket of currencies, has plunged to a level not seen in over four months following the Federal Reserve's (Fed) recent dovish pivot. The central bank's announcement on Wednesday marked the conclusion of its monetary policy tightening cycle and outlined plans for at least three 25 basis points rate cuts in 2024. Coupled with the prevailing risk-on sentiment evident in the global equity markets, the US Dollar is facing intensified selling pressure, weighing on the USD/CAD pair.

In this scenario, the outlook suggests a potential continuation of bearish momentum for the USD/CAD pair. Traders will be closely monitoring key support levels and market dynamics for insights into the pair's future trajectory.


Our preference

Short positions below 1.3450 with targets at 1.3330 & 1.3300 in extension.