On Friday, the rate dropped below 1.366 for the first time since the beginning of August. This was facilitated by fundamental drivers:

→ The US dollar weakens after the Federal Reserve meeting, which signaled the possibility of lowering interest rates next year. Powell said monetary tightening is likely complete and discussions about cuts are "on the horizon."

→ On the contrary, the Bank of Canada remains more hawkish. In a speech on Friday, its chief Tiff Macklem said it was too early to consider cutting interest rates as inflation remained stubbornly above target.

Also, the weakening of the US dollar could have been influenced by disappointing news about Flash Manufacturing PMI values in the US: actual = 48.2, expectations = 49.5, a month earlier = 49.4.

We wrote about bearish signs on the chart back on December 1st.

The current 4-hour chart shows that:

→ the USD/CAD price forms a downward channel (shown in red). What is noteworthy is that the price dropped to its lower limit (potential support);
→ the RSI indicator indicates a strong oversold market;
→ the price only dropped slightly below the September low, and then consolidated intraday - forcing attention to the formation of a false breakout of the low.

Taking into account the above arguments, it is worth assuming a scenario of a rebound from the lower border of the channel. For example, it is possible that the price will test the area 1.346-1.348, or the former support 1.355, resistance from which may be strengthened by the median line of the channel.

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