USD/CAD Tests Pivotal Resistance Ahead of Fed Decision
The Canadian dollar has experienced a sharp rebound from its monthly low, pushing the USD/CAD exchange rate back towards the upper end of the September range. This recovery is now testing a major resistance confluence, particularly with the upcoming Federal Reserve rate decision looming large.
According to technical analysis, buyers need to confirm a breach above this pivotal resistance level to strengthen their case for a larger reversal in the trend. A daily close above 1.3955 would be necessary to validate such an outcome.
Looking ahead, the reaction off this threshold could determine whether the recovery develops into a more meaningful shift or begins to unravel. With the Fed decision just hours away, markets are largely pricing in a 25-basis-point hike, but attention will focus on the updated Summary of Economic Projections (SEP) and the dot plot for clues on the monetary policy path.
A more hawkish set of projections could fuel further U.S. dollar strength and potentially break out above the current resistance level, while a tempered reaction could cap the recent USD/CAD advance.