Market Analysis: The USD/CAD Rate Drops to Its Minimum of 2 Months

<img src="https://images.unsplash.com/photo-1641932969723-c8f0912f4264?crop=entropy&amp;cs=tinysrgb&amp;fit=max&amp;fm=jpg&amp;ixid=M3wxMTc3M3wwfDF8c2VhcmNofDE2fHxjYW5hZGlhbiUyMGRvbGxhcnxlbnwwfHx8fDE3MDE0MjI5NDZ8MA&amp;ixlib=rb-4.0.3&amp;q=80&amp;w=2000" alt="Market Analysis: The USD/CAD Rate Drops to Its Minimum of 2 Months" /><p>This morning, 1 USD was selling for less than 1.354 Canadian dollars – for the first time since October 1st.</p><p>The strengthening of the Canadian dollar and the weakening of the USD was facilitated by the news published yesterday:<br>→ Canada&apos;s real gross domestic product (GDP) grew by 0.1% in September, which exceeded analysts&apos; expectations and reduced the relevance of the recession scenario in Canada.<br>→ The number of applications for unemployment benefits in the US for the week amounted to 218k (a week earlier it was 211k), which may indicate a cooling of the US economy.<br>→ The price index for personal consumption expenditures (PCE) fell to 3% from the previous value of 3.4%. While 3% remains too high to declare victory over inflation, it marks a new series low that is sure to reduce the likelihood of a Fed rate hike.</p><p>In our <a href="https://fxopen.com/blog/en/oa-usd-cad-analysis-the-rate-approaching-important-support/">previous analysis</a> of the USD/CAD market, we wrote that the price could form a rebound from support in the area of 1.36625. However, the rebound to point E was very weak, and after the breakdown, the level 1.36625 showed resistance properties.</p><figure><img src="https://fxopen.com/blog/en/content/images/2023/12/11–3-.png" alt="Market Analysis: The USD/CAD Rate Drops to Its Minimum of 2 Months" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2023/12/11–3-.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2023/12/11–3-.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2023/12/11–3-.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2023/12/11–3-.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>At the same time, the situation on the chart looks bearish:<br>→ price dynamics formed decreasing lows A-B-C-D;<br>→ the bullish trend line (shown in black) is broken;<br>→ price dynamics form new lows and a downward channel (shown in red).</p><p>If we assume that the market will recover from oversold conditions (the RSI indicator is close to going below the 0.3 level), the USD/CAD rate in this case may find resistance from the median line of the channel and the level of 1.36625.</p>