USD/CAD climbs to 6-week high

USD/CAD has leveled off on Tuesday, after starting the week with strong gains. In the North American session, the pair is trading at 1.3309, up 0.03% on the day. Earlier in the day, USD/CAD touched a high of 1.3345, its highest level since mid-August.

Powell pledges to help US economy

With US releases limited to tier-2 data, the markets focused on Fed Chair Jerome Powell’s testimony to the House Financial Services Committee. Powell repeated that the Fed was committed to help the US economy get through the Covid-19 pandemic, which has caused a severe economic downturn. Powell said that the economy has shown improvement, but at the same time, economic activity and unemployment “remain well below pre-pandemic levels, and the path ahead continues to be highly uncertain.”

The Fed recently shifted policy, adopting an “average inflation target” of two percent, which means that the central bank would allow inflation to rise above two percent. The Federal Reserve has signaled that interest rates will not be raised until 2023 at the earliest, but this has not dampened sentiment for the US dollar.

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USD/CAD Technical

• 1.3358 is the next resistance line. This is followed by resistance 1.3414
• 1.3208 is the first line of support. This line is protecting the 1.32 level. Below, there is support at 1.3114

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