USD/CAD wobbling around 1.38 post-FOMC

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Edinburgh) - The Canadian dollar remains on the defensive vs. the greenback, with USD/CAD meandering in the low-1.3800s s far.

    USD/CAD upside intact on Fed

    Spot is coming down from earlier fresh cycle highs around 1.3850 after the Fed has finally raised rates by 25 bp after almost a decade of exceptionally low interest rates; the Committee now expects ‘gradual’ increases in the upcoming periods. The decision to hike rates was unanimous: 10-0.

    Regarding the FOMC projections, the Committee now sees the GDP expanding 2.1% in 2015, 2.4% in 2016 and 2.2% in 2017, while the unemployment should continue to tick lower. FOMC officials now see inflation at 0.4% during the current year, 1.6% in 2016 and 1.9% in 2017.

    USD/CAD levels to consider

    As of writing, the pair is gaining 0.33% at 1.3788 and a break above 1.4000 (monthly high May 2004) would expose 1.4195 (monthly high Jul.2003). On the other hand, the next support lines up at 1.3420 (2-month uptrend) ahead of 1.3255 (55-day sma) and then 1.3231 (100-day sma).

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