The Canadian Dollar (CAD) has weakened against the US Dollar (USD), primarily driven by expectations of further interest rate cuts by the Bank of Canada (BoC).
Key Factors:
- BoC Rate Cut Expectations: The market is anticipating another rate cut by the BoC, which would further weaken the Canadian Dollar.
- US Economic Strength: The US economy has shown resilience, with positive economic indicators supporting the US Dollar.
- Global Economic Uncertainty: Concerns about a potential global economic slowdown have also contributed to the Canadian Dollar’s weakness.
Technical Analysis:
- Overbought Conditions: The USD/CAD pair is currently in overbought territory, as indicated by the RSI. This suggests that a short-term correction may be on the horizon.
- Potential Support and Resistance: The 1.3800 to 1.3900 range could provide support for the pair, while the 1.4000 level could act as a key resistance level.