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With the support of the minutes of the last meeting of the US Federal Reserve, the USD/CAD pair reached two-month highs in the 1.3580 area.

In the report, representatives of the regulator confirmed that the slowdown in inflation in the US economy is insufficient, so the tightening of monetary policy should be continued, and it is possible that the step of increasing the interest rate may return from 25.0 basis points to 50.0 basis points. Experts note that after the publication of the document, the opinions of the officials could become even more “hawkish” since at the time of the meeting, strong January data on the labor market and poor statistics on inflation had not yet appeared. A further increase in the interest rate will strengthen the position of the US dollar against its competitors, which is already supporting its quotes but at the same time, the risks of a downturn in the national economy, which so far remains stable, will increase: according to data released yesterday, its growth slowed down in the fourth quarter of 2022 3, 2% to 2.7% but still remained at high levels.

The Canadian dollar is under pressure due to the correction in oil prices, which is the key export item of the national economy but in general the situation inspires investors with optimism, primarily due to the gradual slowdown in inflation. According to January data, the consumer price index fell from 6.3% to 5.9%, while the core index fell from 5.4% to 5.0%. Prospects for the recovery of the Canadian currency remain but at present, monetary factors dominate the market.

The trading instrument is testing 1.3550 (Fibonacci correction 23.6%, Murrey level [6/8]), consolidation above which will give the prospect of further growth to 1.3672 (Murrey level [8/8]) and 1.3732 (Murrey level [+1/8]). The key “bearish” level is 1.3427 (Murrey level [4/8], the middle line of Bollinger bands), after breaking down which the decline will continue to 1.3305 (Murrey level [2/8]) and 1.3244 (Murrey level [1/8]).

Technical indicators point to the continuation of the upward trend: Bollinger bands and Stochastic are directed upwards, while the MACD histogram is increasing in the negative zone.

Resistance levels: 1.3550, 1.3672, 1.3732. | Support levels: 1.3427, 1.3305, 1.3244.