By Ketki Saxena
Investing.com -- The Canadian dollar traded little changed against the US dollar today, rebounding moderately from its weakest level in two weeks yesterday.
The commodity-linked Canadian dollar gained some support from crude prices, however, gains were limited as risk aversion remained at the forefront, and as weak domestic retail sales cemented bets that the Bank of Canada will keep interest rates on hold next week.
The Canadian dollar remained set for a weekly loss against the US, as cooling domestic CPI data sharply lowered bets of a rate hike from the Bank of Canada at the Oct. 25 policy decision.
Money markets now see a 12% chance of a rate hike next week, compared to 43% before Wednesday’s September CPI data.
Ahead of the Bank of Canada rate decision, analysts at TDS note, “We like leaning against the recent USD/CAD rally into the October Bank of Canada meeting. We continue to prefer fading ahead of the 1.38 level, suggesting a shift back to the lower end of the range near 1.34.”
On a technical level for the pair, analysts at FX Street note, “Daily candlesticks see the USD/CAD trading into near-term highs as a constraining market stance weighs on the pair. Long-term resistance comes from a descending trendline from early 2020’s panic highs of 1.4650, while near-term chart action has the 50-day Simple Moving Average (SMA) rising to provide technical support from 1.3575."
“A firm break higher leaves the pair open to make a challenge of 1.3800 near March’s swing highs, while the downside will have to tangle with the 200-day SMA before revisiting lows near 1.3400 from September.”