USDCAD daily trend analysis with resistance and support levels

The Bank of Canada has increased its target for the overnight rate to 4.75%, this is the first rate hike since the tightening policy was paused in January, and also reaching the highest level in 22 years. Global inflation rates are dropping due to lower energy prices, but underlying inflation remains high. The bank states the labor market remains tight as new immigrants and higher participation rates expand the workforce, but these new workers are quickly hired due to high labor demand. Although the bank has not committed to further tightening, market expectations are geared towards a further increase of 0.25% in the interest rate by July, and the prospects for an additional rate increase in September are growing.

Nevertheless, there is a key condition for the Canadian dollar to realize this positive outlook--the Federal Reserve needs to maintain interest rates unchanged next week. If not, we might see a swift pivot that could potentially trigger the US dollar go up.

Technical Viewpoint, daily trend with resistance levels set between 1.353, and support level are at 1.325--1.330