USD/CAD aims to reach 1.3900 on downbeat Oil prices, awaits FOMC decision

USD/CAD continues to gain ground ahead of the FOMC policy decision.
Crude oil prices dropped to two-month lows; weakening the Loonie Dollar.
Canada’s GDP experienced no growth, remaining flat at 0.0% in August.

Akhtar Faruqui FXStreet

USD/CAD attempts to extend the gains for the second consecutive day on the back of improved risk appetite ahead of the US Federal Reserve (Fed) monetary policy decision. The spot price trades slightly higher near 1.3880 during the Asian session on Wednesday.

The US Dollar Index (DXY) received a boost from increased US Treasury yields on Tuesday, hovering around 106.70 with the 10-year US bond yield sitting at 4.90%, by the press time. Market sentiment leans towards the expectation that the US Fed will maintain the current interest rate at 5.5% in the Wednesday meeting. If there's a hawkish statement from the Federal Open Market Committee (FOMC) regarding the future trajectory of interest rates, it could potentially strengthen the US Dollar (USD).

The conflict between Israel and Hamas has raised concerns about potential disruptions in the oil supply from the Middle East. Despite these worries, Crude oil prices have fallen to two-month lows putting pressure on the Canadian Dollar. Western Texas Intermediate (WTI) trades below $81.00 per barrel at the time of writing.

Additionally, on Tuesday, the disappointing data of the monthly Canadian GDP might have undermined the commodity-linked Loonie Dollar (CAD) and acted as a tailwind for the USD/CAD pair.

The release of Canada’s Gross Domestic Product (GDP) data from Statistics Canada on Tuesday, revealed that the economy experienced no growth, remaining flat at 0.0% in August. This result contradicts market predictions, which anticipated a 0.1% growth during the same period. Furthermore, S&P Global Manufacturing PMI will be eyed for gaining more cues on Canada’s economic scenario.

USD/CAD: additional levels to watch

Overview
Today last price	1.3876
Today Daily Change	0.0001
Today Daily Change %	0.01
Today daily open	1.3875

Trends
Daily SMA20	1.3714
Daily SMA50	1.3619
Daily SMA100	1.3454
Daily SMA200	1.3485

Levels
Previous Daily High	1.3892
Previous Daily Low	1.3814
Previous Weekly High	1.3881
Previous Weekly Low	1.3661
Previous Monthly High	1.3892
Previous Monthly Low	1.3562
Daily Fibonacci 38.2%	1.3862
Daily Fibonacci 61.8%	1.3844
Daily Pivot Point S1	1.3828
Daily Pivot Point S2	1.3782
Daily Pivot Point S3	1.375
Daily Pivot Point R1	1.3907
Daily Pivot Point R2	1.3939
Daily Pivot Point R3	1.3985

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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