The USD/CAD pair tanked on Tuesday as the dollar weakened against the major global currencies. As a result, the US dollar to Canadian dollar exchange rate fell 0.6% in a single day. The latest analysis reveals that the pair might have more downside as the next demand zone lies lower than the current price.
At press time, the USDCAD pair was down 0.6% for the day. This negative price action came right after the release of the October CPI data which showed that the inflation is on a downward trajectory after increasing abruptly in the last year.
Consequently, the dollar strength index fell 1.43% on Tuesday. This was the biggest one-day decline in the DXY index in 2023. The long-term bond yields also tumbled as the 10-year yields tanked 3.9% in a single day. This weakness in the greenback resulted in a very positive price action in the risky asset classes.
It can be seen on the chart above that USD/CAD has faced another rejection from the 1.383 resistance level. This possibility was mentioned in my previous analysis of the pair due to its significance.
The most likely scenario now seems to be a retest of the 1.367-1.364 demand zone which is mentioned on the chart as a red box.
This post was last modified on Nov 14, 2023, 18:27 GMT 18:27