- The Loonie is under pressure amid falling crude oil and a slump on Wall Street.
- The momentum of the US dollar remains, even as US yields recede.
The USD / CAD is going up for the fifth day in a row and holding all the gains. It is moving around 1.2340, close to the six-week high it reached on Thursday at 1.2346, fueled by a rally in the US dollar.
The dollar rose after the statement and the FOMC projections. The Fed, which signaled the possibility of an earlier-than-expected interest rate hike, unleashed a new stretch of the dollar that is still running. USD / CAD found resistance at 1.2340 / 45 for now. Keep pushing up. Above the next resistance is seen at 1.2380 followed by 1.2400.
The odds of a consolidation or a bearish correction arise from the fact that the USD / CAD has risen more than 250 pips from the level it was a week ago. There are no signs at the moment and the bullish tone remains intact.
Economic data from the US disappointed expectations with jobless claims rising above 400,000 again and the Philadelphia Fed falling to 30.7. Still, the dollar held onto gains. Not even a decline in US yields made up for the recent strength.
Another negative factor for the loonie and also for emerging market currencies and commodities is falling equity prices. Investors became cautious after the FOMC. Weaker stocks mean higher demand for safe havens, like the US dollar.
Technical levels
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