USD/CAD climbs further, challenges 1.3400

USD/CAD staged an impressive rally over the last session as the dollar surged on the back of Fed’s policy decision.

USD/CAD rose over 300 pips from a 1-month low of 1.3080 to a 2-week peak of 1.3397 during the New York session amid broad greenback gains. At time of writing, the pair continues to trade near recent highs around 1.3390, recording a 0.87% gain on Thursday.

Data showed US consumer price index and core prices, both increased 0.2% in November matching expectations. Year-on-year prices rose 1.7% and 2.1% respectively. Meanwhile, US jobless claims fell to 254,000 in the week ended Dec 10, marking the 93rd week below 300,000.

On Wednesday, the Federal Reserve decided to raise the target range for the federal funds rate to 0.5-0.75%. While the move was highly anticipated, the dollar strengthened as the dot plot showed most members expect three hikes throughout 2017 versus two hikes seen in September’s meeting.

USD/CAD technical levels

In terms of technical levels, next resistances line up at 1.3390 (Dec 15 high), 1.3437 (Dec 14 high) and 1.3463 (Nov 30 high). On the other hand, supports are seen at 1.3336 (50-day SMA), 1.3267 (Dec 15 low) and 1.3235 (10-day SMA).