USD/CAD drops into key support with markets pricing in a pivot

USD/CAD is under pressure and scoring fresh multi-day lows to 1.3274 so far from a high of 1.3379 and is down some 0.2%. The Federal Reserve's dovish tilt, despite inflation, ''running very hot'', has seen the market move out of the greenback and into risk-positive asset classes, such as commodities and stocks, supporting the Loonie. 

The central bank raised interest rates for the eighth time in a year but slowed its pace to a quarter of a point in a nod to an improved inflation outlook. However, the sell-off in the US Dollar gathered pace as the cracks in Fed's chairman's, Jermoe Powell, comments started to reveal a dovish shift at the Fed. 

Jerome Powell's key comments 

"We can now say for the first time that the disinflationary process has started".

Powell speech: Very difficult to manage the risk of doing too little on rates

Powell speech: Disinflationary process is in early stages

Powell speech: History cautions against prematurely loosening policy

Powell speech: Well-anchored longer-term inflation expectations not grounds for complacency

Powell speech: Will likely have to maintain restrictive stance for some time

Powell speech: Very difficult to manage the risk of doing too little on rates

Powell speech: Policymakers did not see this as a time to pause

Powell speech: Will not be appropriate to cut rates this year according to our current outlook

USD/CAD technical analysis

As the chart above shows, that was dran before the Fed, we have already seen the bears chip away at the 1.3305 structure, and this is technically already broken, exposing the 1.3220s and then the 1.3150s. On the upside, we have 1.3380s that guard the 1.3450/80s.

The move following the Fed is digging in at the structure in possible preparation for a downside extension.