USD/CAD advances beyond 1.3280 as WTI edges lower after EIA report


  • EIA reports an increase of 1.1 million barrels in US crude oil stocks.
  • WTI continues to fall toward the $58 handle.
  • US Dollar Index remains stuck in daily range as focus shifts to FOMC.

The USD/CAD pair dropped to 1.3240 area in the early trading hours of the American session but didn't have a difficult time reversing its direction. As of writing, the pair was up 0.29% on the day at 1.3282.

Falling crude oil prices seem to be weighing on the commodity-sensitive and driving the pair higher on Wednesday. The weekly report published by the Energy Information Administration today revealed that crude oil stocks in the US increased by 1.1 million barrels and put additional bearish pressure on oil prices. As of writing, the barrel of West Texas Intermediate was down 0.65% on the day at $58.35.

Inflation in Canada softens

Earlier today, the data published by Statistics Canada revealed that annual inflation, as measured by the Consumer Price Index (CPI), edged lower to 1.9% and missed the market expectation of 2%. Although the reading was not too far off of analysts' estimate, it seems to be hurting the demand for the Loonie as it could be seen as a factor that would cause the Bank of Canada to hold the policy rate unchanged for longer than expected. 

At 18:00 GMT today, the Federal Reserve will be announcing its policy decision and release the updated economic projections. Later at 18:30 GMT, the Federal Open Market Committee Chairman, Jerome Powell, will be delivering his remarks on the monetary policy outlook in a press conference.

Previewing the event, Deutsche Bank analysts said that they were expecting another 25 basis points rate cut. “The main focus will be on where they go after this week," analysts added.

"Our economists think a continued dovish bias should be evident in the statement language, Summary of Economic Projections and Chair Powell’s press conference. It seems Powell is still keen to emphasise the baseline as a mid-cycle slowdown though over anything more sinister but it’s hard to imagine him not highlighting the risks, especially around trade.”

FOMC Preview: What 13 major banks are expecting from September meeting?

Technical levels to watch for

USD/CAD

Overview
Today last price 1.3282
Today Daily Change 0.0038
Today Daily Change % 0.29
Today daily open 1.3244
 
Trends
Daily SMA20 1.3256
Daily SMA50 1.321
Daily SMA100 1.3274
Daily SMA200 1.3312
 
Levels
Previous Daily High 1.33
Previous Daily Low 1.3234
Previous Weekly High 1.329
Previous Weekly Low 1.3134
Previous Monthly High 1.3346
Previous Monthly Low 1.3178
Daily Fibonacci 38.2% 1.3275
Daily Fibonacci 61.8% 1.3259
Daily Pivot Point S1 1.3218
Daily Pivot Point S2 1.3193
Daily Pivot Point S3 1.3152
Daily Pivot Point R1 1.3284
Daily Pivot Point R2 1.3325
Daily Pivot Point R3 1.3351

 

 

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