USD/CAD extends falls on Fed dot-plot, higher oil, NAFTA hopes

The USD/CAD is trading some 1% down on the day around C$1.2920.
The Federal Reserve raised rates as expected but did not alter the path of hikes for 2018.
Oil prices and NAFTA are supportive of the Canadian Dollar.

Yohay Elam FXStreet

The USD/CAD is trading around C$1.2930, down some 1% on the day after having reached a low of 1.2913. The primary driver in the markets is the rate decision of the Federal Reserve. The Fed raised the interest rate to a maximum of 1.7% as widely expected. In the accompanying information, the central bank left its forecast for a total of three hikes for 2018 while upgrading the estimates for 2019, 2020, and the long term.

The initial reaction was choppy, but the US Dollar weakened after the data was digested. Fed Chair Jerome Powell is speaking after the decision.

Earlier, the Canadian Dollar enjoyed a rise in oil prices. Oil inventories saw a drawdown and pushed WTI Crude Oil above $65. Also, reports about progress in NAFTA talks have supported the Canadian Dollar. The US has reportedly removed its demand for having at least 50% American content in cars. Other optimistic statements about the talks have also helped the Canadian currency.

USD/CAD Technical Picture

The USD/CAD may find support around 1.2920, a level of resistance in 2017. Further down, 1.2820 was a low point in early March, and this is followed by 1.2760, a high in late February.

On the upside, the round number of 1.3000 is resistance. A break to the upside opens the door to 1.3120, the recent high point. 1.3180 is the next line to watch.

USDCAD post Fed March 21 lower on the day

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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