USD/CAD: Amid the results of the June meetings of the Bank of Canada and the Fed – Analytics & Forecasts – 27 June 2023

Immediately after the decision of the Bank of Canada to raise the interest rate, the USD/CAD pair fell to the weakest value of the month at 1.3321 and then continued to decline. At the same time, the Canadian dollar is currently one of the most successful currencies on the market, strengthening both against the US dollar and in major cross rates.

Given the fact that at the Fed’s June meeting, the interest rate was kept at the current level of 5.25%, USD/CAD remained under bearish pressure, continuing to decline at the current moment, when it reached an important long-term support level 1.3135.

In total, the pair has lost more than 3.1% in price this month, having also reached a local 9-month low at 1.3117.

In case of breakdown of the key long-term support level 1.3075, it will be possible to speak about the breakdown of the long-term USD/CAD bullish trend with the prospect of further decline of the pair to the strategic support level of 1.2650, which separates the global bull market from the bear market.

It seems that the monetary policy of the central banks of Canada and the United States is once again coming to the fore in the USD/CAD dynamics.

The vector of the dynamics of the USD/CAD pair may again turn to the opposite if, following the results of the July meetings, the Fed’s interest rate is raised, and the interest rate of the Bank of Canada remains at the same level.

After the breakdown of the important short-term resistance level 1.3205, USD/CAD will resume growth towards the key medium-term resistance levels 1.3390, 1.3430, 1.3450, the breakdown of which will again bring USD/CAD into the medium-term bull market zone and resume the positive dynamics of the pair within the long-term and global bull markets.

Today, at 12:30 and 14:00 (GMT), a new increase in volatility in the quotations of the Canadian dollar and the USD/CAD pair is expected: at this time, Statistics Canada will publish data on the dynamics of inflation in Canada (consumer prices account for most of the overall inflation), from the United States will be received fresh data on the dynamics of orders for durable goods (expected to decline by -1.0% after rising by +1.1% in the previous month), and at 14:00 – on the dynamics of sales of new homes in the United States (here, too, a relative slowdown of +0.5% is expected after growth of +4.1% in April), and the level of consumer confidence in June.

Support levels: 1.3135, 1.3075, 1.3000, 1.2740, 1.2650

Resistance levels: 1.3205, 1.3315, 1.3350, 1.3390, 1.3430, 1.3450, 1.3600, 1.3665, 1.3700, 1.3810, 1.3860, 1.3900, 1.3970, 1.4000