• USD/CAD slipped lower on Wednesday as investors digested interest rate decisions from the Bank of Canada.
• The Bank of Canada cut its key overnight rate to 2.25% on Wednesday, as expected, and indicated it may pause further easing unless there’s a shift in the inflation or economic outlook.
• Governor Tiff Macklem said the rate cut was aimed at supporting the economy amid disruptions caused by U.S. tariffs, while ensuring inflation remains close to the Bank of Canada’s 2% target.
•The Bank of Canada (BoC) seeks to maintain price stability by keeping annual inflation anchored at 2%, the midpoint of its 1%–3% target range.
• Canada’s economy shrank by 1.6% in the second quarter, and preliminary data indicate it may narrowly avoid another contraction in the third quarter.
• Technical highlight downside risks for USD/CAD, with momentum studies, 11, 14 and 21 DMAs tracking south.
• Immediate resistance is located at 1.3991(38.2%fib), any close above will push the pair towards 1.4039(Oct 24th high).
• Support is seen at 1.3908 (50%fib) and break below could take the pair towards 1.3896 (Lower BB).
Recommendation: Good to sell around 1.3920, with stop loss of 1.3980 and target price of 1.3860
