USD/CAD: Sellers keep lurking around 1.3200, Fed in focus
|- USD/CAD markets fifth consecutive daily moves below 1.3200.
- WTI gains, risk reset favor the pair sellers off-late.
- Canadian CPI, US Retail Sales can entertain traders ahead of the FOMC.
USD/CAD pulls back from an intraday low of 1.31368 to 1.3173 amid the pre-European trading on Wednesday. Even so, the loonie pair losses 0.10% daily while marking another day below the 1.3200 threshold.
Although the US dollar’s weakness during the pre-Fed trading lull becomes the key driver, recent strength in oil prices, Canada’s biggest export item, joins mildly positive risk-tone sentiment to weigh the quote downwards. Also on the negative side could be the comparative downbeat conditions of Washington versus Ottawa as far as the coronavirus (COVID-19) is concerned.
Having earlier heard the trade rhetoric from Canada, the county extended its border restrictions with America by one moth to late-October. However, the calls of the Trump administrations’ refrain from levying extra aluminum tariffs on Canada favors the Loonie.
Furthermore, news that Texas marked a three-week high of daily cases confronts US President Donald Trump’s optimism over the virus vaccine.
Elsewhere, WTI oil prices rise more than 1.0% in Asia as hurricane Sally affects energy output from the Gulf of Mexico. The barrel of black gold earlier benefited from a surprise draw in weekly inventory reports from the American Petroleum Institute (API).
While the Federal Open Market Committee (FOMC) decision will be crucial for the day, August month’s Inflation data for Canada and the US Retail Sales may offer an intermediate trading direction. Forecasts suggest that the Canadian Consumer Price Index (CPI) may recovery from 0.1% prior to 0.4%. Additionally, the BOC CPI Core is also expected to rise from 0.7% to 0.9% during the reported month. On the other hand, the US Retail Sale might ease from 1.2% MoM to 1.0%.
Technical analysis
Other than 1.3200 immediate resistance, the monthly peak surrounding 1.3260 and 50-day EMA level near 1.3285 can also challenge near-term USD/CAD advances. On the flip side, the monthly support line near 1.3125 becomes important to watch.
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