Canadian Dollar slides to five-week low after Fed’s hawkish decision

The Canadian Dollar (CAD) experienced a decline to a five-week low on Thursday, as the US Dollar (USD) outperformed amid the Federal Reserve's (Fed) hawkish monetary policy decision. On Wednesday, the Fed raised interest rates by 25 basis points (bps) to 3.75%-4.00%, after remaining unchanged for the past five meetings. The USD/CAD pair hit a fresh five-week high near 1.4000 in the Asian session.

While the Fed's decision bolstered the US Dollar, a pause in the oil price rally also affected the CAD, as it is a net energy exporter. Technical analysis shows that USD/CAD is currently trading at 1.3992, above the 20-period Exponential Moving Average (EMA) at 1.3890, indicating bullish momentum. Support levels are clustered around 1.3980, 1.3898, and 1.3890, while resistance lies at the 23.6% Fibonacci retracement at 1.4082.