Ella 
USD/CAD is trending lower, weighed down by the dovish stance of the Federal Reserve’s interest rate decision on Wednesday, in line with consensus expectations. In Asia on Thursday, USD/CAD fell to around 1.3470.
The Federal Reserve’s “Summary of Economic Forecasts” added further downward pressure on the dollar, showing a 50 basis point drop in interest rate forecasts for 2024. These factors combined have contributed to the bearish trend in USD/CAD.
Rising crude oil prices provided support for the Canadian dollar (CAD). The USD/CAD pair may further test the key support at 1.3450 level.
Technical indicators for the USD/CAD currency pair, the MACD indicator, are signaling a potential bearish trend. With the MACD indicator trading below its midline and diverging below its signal line, this suggests further declines in USD/CAD could lead to a move closer to the psychological zone around the 1.3400 level, with next support likely at the August low of 1.3378.
Technical analysis adds to the dovish bias in USD/CAD, highlighting the 14-day relative strength indicator below 50. The relative strength indicator below 50 points to weakness in USD/CAD, maintaining the broader bearish outlook.
On the upside, USD/CAD faces strong resistance at the 1.3500 level. A clear break above this level is likely to ignite bullish momentum, sending USD/CAD towards testing the main resistance area near 1.3550, followed by the 23.6% Fibonacci retracement at 1.3565.
If USD/CAD manages to break above these levels, the next target area will be at 1.3599, followed by the 21-day exponential moving average (EMA) at the psychological level of 1.3600.
