FxWirePro: USD/CAD downside pressure builds, key support level in focus

• USD/CAD eased on Wednesday  as investors digested interest rate decisions from the Bank of Canada and the U.S. Federal Reserve.

•The Federal Reserve kept rates unchanged, but in its most divided decision since 1992 flagged rising inflation concerns, with three officials dissenting against maintaining a bias toward rate cuts.

• The Bank of Canada held its key rate at 2.25%, as expected, signaling that any adjustments may be gradual if the outlook holds, but warning that persistently high oil prices could fuel inflation and prompt consecutive rate hikes.

• Investors were pricing in 59 basis points in tightening this year by BOC, up from 39 basis points before the policy decision, swap market data showed.

• U.S. oil prices, a key export for Canada, surged nearly 7% to $106.88 per barrel as stalled U.S.-Iran talks heightened fears of prolonged disruptions to Middle East supply.

•  Immediate resistance is located at 1.3725( 50%fib), any close above will push the pair towards 1.3748(SMA 20).

• Support is seen at 1.3628(61.8%fib) and break below could take the pair towards 1.3516(Lower BB).

Recommendation: Good to sell  around 1.3700, with stop loss of 1.3830 and target price of 1.3620