• USD/CAD dipped on Friday as growing divergence in monetary policy between the BoC and the Fed is underpinning the Canadian dollar.
• Canada ‘s Gross Domestic Product (GDP) data released on Tuesday did little to shift sentiment around USD/CAD.
•The Bank of Canada kept its benchmark rate at 2.25% in December, indicating that current policy settings are well calibrated to support the economy and maintain inflation close to target.
•In contrast, expectations are that the Fed will proceed more cautiously, with markets pricing in further easing next year following 75 bps of rate cuts already delivered this year.
• Immediate resistance is located at 1.3716(38.2%fib), any close above will push the pair towards 1.3821(38.2%fib).
• Support is seen at 1.3623(Lower BB) and break below could take the pair towards 1.3573(Lower BB).
Recommendation: Good to sell around 1.3680, with stop loss of 1.3760 and target price of 1.3600
