USD/CAD Forecast: Dollar Vulnerable Below 1.3600 on Fed Cut Bets

USD/CAD has declined 0.4% to 1.3550 as the dollar remains under pressure from heightened Federal Reserve rate cut expectations. Markets are fully pricing in a 25 basis point cut at this week's FOMC meeting, with some traders speculating on a potential 50 basis point reduction. The Canadian dollar is finding additional support from crude oil holding above $70 per barrel, benefiting Canada's export revenues. Technical analysis shows the pair has broken below the key 1.3600 support level, opening the path toward 1.3500 psychological support. The 50-day moving average at 1.3620 is now acting as dynamic resistance. Bank of Canada's relatively hawkish stance compared to the Fed's expected dovish pivot is creating a favorable environment for CAD strength. Traders should watch for any Fed communication regarding the pace of future cuts, as a more aggressive easing cycle could push USD/CAD toward the 1.3450 support zone.