The USD/CAD pair trades near 1.4350, slightly down in early European trading. While crude oil price gains support the Canadian Dollar, bets on slower Federal Reserve rate cuts in 2025 cap losses for the USD/CAD. The pair remains bullish above the 100-day EMA and with a positive RSI.
USD/CAD softens to near 1.4350 in Tuesday’s early European session. The positive view of the pair prevails above the 100-day EMA with the bullish RSI indicator. The first upside barrier to watch is 1.4450; the initial support level is seen in the 1.4210-1.4200 zone. The USD/CAD pair trades in negative territory around 1.4350 during the early European session on Tuesday. The recovery in crude oil prices lifts the commodity-linked Canadian Dollar (CAD) and creates a headwind for USD/CAD .
However, the downside for the pair might be limited amid the rising bets that the Federal Reserve (Fed) will slow the pace of interest rate cuts in 2025. The markets are likely to be quiet ahead of the New Year holiday. According to the daily chart, the constructive outlook of USD/CAD remains intact as the pair is above the key 100-period Exponential Moving Average(EMA). Additionally, the upward momentum is reinforced by the 14-day Relative Strength Index (RSI), which stands above the midline near 63.50, suggesting further upside looks favorable. The immediate resistance level emerges at 1.4450, the high of December 27. Any follow-through buying above this level could see a rally to 1.4517, the upper boundary of the Bollinger Band. Further north, the next hurdle to watch is 1.4668, the high of March 16, 2020. On the other hand, the initial support level for the pair is located at the 1.4210-1.4200 region, representing the low of December 13 and the psychological level. Extended losses could pave the way to 1.4042, the lower limit of the Bollinger Band. The additional downside filter to watch is 1.3955, the 100-day EM
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