USD/CAD collapses toward 1.2400 at 2-year low

The US dollar tumbled after the FOMC statement. USD/CAD broke below 1.2500 and fell to fresh 2017 lows near 1.2400. The pair remains under pressure as the greenback resumes last week slide across the board. 

US Dollar approaches 13-month lows after FOMC disappoints

The Federal Reserve as expected left interest rate unchanged. The most significant change from the previous statement was the mention that it expects to begin the balance sheet normalization program “relatively soon”. 

The statement pushed the US sharply to the downside while at the same time sent bonds higher. Crude oil remains near weekly highs above $48.00 a barrel, adding support to the bearish bias in USD/CAD. 

FOMC Sticks to Script: balance sheet unwind to begin "relatively soon" USD retreats - BBH

The pair bottomed at 1.2413, the lowest since June 2015. The pair is falling for the seventh day in a row as it continues to look for a new support. 

Levels to watch

To the downside, the next support levels might be seen at the 1.2400 handled, followed by 1.2350 (Feb 2015 low). On the upside, resistance level now could lie at 1.2475/80 (Jul 25 low) and 1.2515/20.