The US Dollar (USD) rallied against the Canadian Dollar (CAD) on Wednesday, increasing the price of USDCAD to more than 1.3000 amid some key economic events. The technical bias remains bearish because of a lower low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded around 1.3111. A hurdle can be noted near 1.3189, the intraday high of yesterday ahead of 1.3210, the 50% fib level and then 1.3600, the confluence of psychological number as well swing high of the last major upside rally as demonstrated in the given below daily chart.

On the downside, the pair is likely to find a support around 1.3039, the trendline support area ahead of 1.3029, the swing low of the last major downside move and then 1.3000, the psychological number. The technical bias shall remain bearish as long as the 1.3600 resistance area is intact.

FOMC Member’s Speach

New York Fed President William Dudley, an FOMC voter, said that 2 percent inflation seemed very likely over the next couple of years in a speech on Tuesday. He went on to strike an optimistic tone about economic expansion over the next few years and highlighted the large increase in consumer confidence. San Francisco Fed President John Williams – who is not an FOMC voter this year – spoke later in the day. Like Dudley, he too saw the Fed as getting closer to 2 percent inflation. He added that he sees a good case for three rate hikes in 2017. As for his views on fiscal policy, Williams said he will re-assess his outlook once new policies are in place but allowed that government spending could lift growth in the next year or two.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.