By Ketki Saxena
Investing.com -- The Canadian dollar traded little changed against the US dollar today, as traders digested messaging from US Fed Chair Jerome Powell that put a November pause on the table, pressuring the US dollar.
Powell noted that the Fed would be "proceeding carefully" with any further rate hikes, but warned that more rate hikes could be on the way if the US economy heats up.
The Canadian dollar meanwhile gained some support from crude prices, which shrugged off worries of increasing supply from Venzuela, boosted by Powell’s comments.
On a fundamental level for the Canadian dollar, analysts at National Bank note, “Our scenario also assumes difficulties for the US economy in the coming months and that should be accompanied by an easing in monetary policy by the Fed. That could set up a stabilization of the Canadian Dollar and even some appreciation in the later part of 2024.”
“We believe the repricing of hikes for the Bank of Canada is likely overdone and the CAD could see an interval of weakness especially if the economy is to fall in technical recession in the coming quarters.”
On a technical level for the pair, analysts at FX Street note, "Momentum on the daily candlesticks continues to find support from a rising trendline originating from 1.3100, in conjunction with a bullish-leaning 50-day SMA driving into 1.3575 and building a technical support floor to catch any downside extensions in the USD/CAD."
"The pair continues to test the boundaries of a descending trendline drawn from 2020’s extreme peaks of 1.4668, and upside momentum could get constrained moving forward as the near-term uptrend runs against long-term resistance."