The Canadian dollar is trading near a two-week low against the US dollar, pressured by a sharp decline in crude oil prices and cautious positioning ahead of the Federal Reserve's monetary policy meeting. West Texas Intermediate (WTI) crude has slipped below key support levels, directly weighing on the loonie due to Canada's status as a major oil exporter. This inverse correlation has pushed the USD/CAD pair higher, with the US dollar also benefiting from a broadly stronger tone amid expectations that the FOMC will hold rates steady but may signal a hawkish stance on future cuts.
Technical indicators reinforce the bearish Canadian dollar outlook. USD/CAD has broken above its 50-day moving average and is testing resistance near 1.3650. A sustained break above that level could open the door to further gains toward 1.3700 and possibly 1.3800. Immediate support lies at 1.3550, with a deeper floor at 1.3500. Market focus remains squarely on Fed Chair Jerome Powell's remarks; any hint of fewer rate cuts could extend the greenback's advance and keep the loonie under pressure. Conversely, a recovery in oil prices or a more dovish Fed message would provide relief.
