USD/CAD Price Analysis: Edges down from one-year high of 1.3880, Fed policy in focus

USD/CAD falls modestly from one-year high at 1.3880 as the US Dollar retreats.
Janet Yellen said high US bond yields reflect strong confidence in the US economy.
Investors await BoC Macklem speech and Fed’s monetary policy.

Sagar Dua FXStreet

The USD/CAD pair falls gradually from the one-year high of 1.3880 in the European session. The Loonie asset drops as the US Dollar Index (DXY) slips sharply from 106.70 as investors shift focus to the interest rate decision by the Federal Reserve (Fed), which will be announced on Wednesday.

The US Dollar Index (DXY) faces selling pressure as investors hope that the Fed is done with hiking interest rates due to higher US Treasury yields. 10-year US bond yields have risen to 4.85% and have tightened financial conditions significantly.

US Treasury Secretary Janet Yellen said last week that high US bond yields reflect strong confidence in the US economy and indicate that interest rates will remain higher for a longer period.

The Canadian Dollar would dance to the tunes of the speech from Bank of Canada (BoC) Governor Tiff Macklem, which is scheduled for Wednesday. BoC Macklem may provide guidance on interest rates and inflation in Canada.

USD/CAD struggles to extend upside above the one-year high around 1.3880. The near-term demand for the Loonie asset remains upbeat as the 20-day Exponential Moving Average (EMA) at 1.3715 is sloping toward north.

The Relative Strength Index (RSI) (14) shifts into the bullish range of 60.00-80.00, which indicates that the bullish momentum has triggered.

A decisive break above October 27 high at 1.3880 would expose the round-level resistance at 1.3900, followed by 13 October 2022 high at 1.3978.

In an alternate scenario, a breakdown below October 24 low around 1.3660 would drag the asset to the round-level support of 1.3600. A further breakdown could expose the asset to October 7 low at 1.3570.

USD/CAD daily chart

USD/CAD

Overview
Today last price	1.3849
Today Daily Change	-0.0022
Today Daily Change %	-0.16
Today daily open	1.3871

Trends
Daily SMA20	1.3698
Daily SMA50	1.3607
Daily SMA100	1.3444
Daily SMA200	1.348

Levels
Previous Daily High	1.3881
Previous Daily Low	1.3796
Previous Weekly High	1.3881
Previous Weekly Low	1.3661
Previous Monthly High	1.3694
Previous Monthly Low	1.3379
Daily Fibonacci 38.2%	1.3848
Daily Fibonacci 61.8%	1.3829
Daily Pivot Point S1	1.3818
Daily Pivot Point S2	1.3765
Daily Pivot Point S3	1.3734
Daily Pivot Point R1	1.3902
Daily Pivot Point R2	1.3934
Daily Pivot Point R3	1.3987

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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