USDCAD gives up early gains after a surprising interest rate cut by Federal Reserve. The Fed cut the interest rates by 50 basis points to 1% -1.25% in an emergency move amid the coronavirus outbrteak. Fed noted that is responding to evolving risk from the virus outbreak. The committee added that the U.S. economy remains strong and repeated that is closely watching the developments and will act as appropriate to support the economy.
Earlier today the United States ISM-NY Business Conditions Index registered in at 51.9, topping the forecasts of 24.1 in February. The Canadian dollar supported by stronger crude oil prices, Canada’s main export product, as the crude oil price is 2.20% higher at $47.49.
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USDCAD Technical Outlook
The USDCAD hit the 200-hour moving average after the news but managed to rebound quickly, and as of writing is 0.15% higher 1.3340. The pair yesterday corrected sharply from five-month highs as the rally that started in early 2020 is intact. The technical outlook is bullish for USDCAD despite today’s surppprising interest rate cut and higher levels might be on the cards.
On the upside, first resistance stands at 1.3379 the daily high. In case of a break above, the next hurdle is at 1.3431 the high from yesterday’s trading session. Next level for bulls is at 1.3465 the high from February 28th .
On the flip side the first support for the USDCAD pair stands at 1.3318 the daily low. If the USDCAD pair breaks below, the next support level will be met at 1.3269 the low from February 26th trading session. In case of a move lower then the next target will be met at 1.3242 the February 24th lows.
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