USD/CAD finds support at 6-month low ahead of Fed and BoC decisions

USD/CAD has stabilized at a 6-month low near 1.3450, finding technical support ahead of crucial central bank decisions from both the Federal Reserve and Bank of Canada. The pair has declined over 5% from its October highs, driven by diverging monetary policy expectations and elevated oil prices supporting the Canadian dollar. Technical indicators suggest oversold conditions, with RSI below 30 and the pair trading well below its 50 and 200-day moving averages. Key support lies at the current 1.3450 level, while resistance is seen at 1.3550 and 1.3620. Both central banks are expected to maintain current rates, but forward guidance will be critical for determining the pair's next directional move. The BoC may signal concerns about housing market cooling, while the Fed could acknowledge improving inflation trends. Oil prices above $85/barrel continue providing CAD support. A break below 1.3450 could accelerate losses toward 1.3400, while hawkish Fed surprises might trigger a relief rally.