USD/CAD breaks above 1.3200 after Fed cuts rates again and hints at pause

USD/CAD rises further above 1.3200, heads for the highest close since October 16.
Greenback gains momentum across the board after Fed cut rates, signals pause.

Matías Salord FXStreet

The USD/CAD broke higher and climbed to 1.3207, hitting a fresh one-week high following the release of the FOMC statement. The pair was already sharply higher for the day on the back of the Bank of Canada meeting.

The Federal Reserve cut the interest rate to the 1.5%-1.75% range, making the third consecutive cut. The Fed signaled that at the next meeting, it might put monetary policy on hold. Two FOMC members, Kansas City Fed President George, and Boston Fed President Rosengren, preferred to keep interest rates unchanged. As of writing, Chairman Powell is reading a statement and will then answers questions.

The Greenback climbed supported by hints of a pause at the Fed. The DXY printed fresh highs and is testing the weekly top. The momentum favors the upside with the US Dollar also rising against commodity and emerging market currencies.

Earlier today, the Bank of Canada announced it kept interest rates unchanged, but the Loonie weakened as the central bank presented a cautious tone. It mentioned “risks are more tilted to the downside than before,” adding that “the resilience of Canada’s economy will be increasingly tested as trade conflicts and uncertainty persist”.

Levels to watch

The USD/CAD is having the biggest daily gain in a month, making the rebound from 1.3050 even more interesting and now is attempting to hold on top of 1.3190 that could lead to more gains.

On the upside, the next resistance is located at 1.3210 followed by 1.3235 and 1.3275. On the flip side, 1.3180 has become the immediate support followed by 1.3145.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD looks offered just above 0.7100

AUD/USD has extended Monday’s pessimism, briefly breaching below the key. 0.7100 contention zone to hit three-day lows. The firmer tone in the Greenback has been keeping the Aussie under pressure while investors continued to gear up for the upcoming Trump-Xi Summit on Thursday.

USD/JPY holds small gains near 157.50 as JPY intervention risks loom

USD/JPY posts modest gains while trading near 157.50 in the Asian session on Tuesday as intervention fears help limit losses for the Japanese Yen. However, the BoJ's dovish rate hike to a 31-year high keeps JPY bulls on the back foot. Meanwhile, the US Dollar retains a bullish undertone amid the Fed's hawkish outlook and escalating Middle East tensions, providing tailwinds for the pair.

Gold makes a U-turn; focus shifts to $4,400

Gold regains balance and now trades with decent gains, approaching the key $4,400 mark per troy ounce on Tuesday. The yellow metal’s advance comes despite the resumption of the buying interest in the US Dollar, mixed US Treasury yields and geopolitical uncertainty.

Bitcoin reclaims key moving averages, altering bear cycle pattern

Bitcoin (BTC) may have altered its bear-cycle pattern after climbing above its 50-day, 100-day, 200-day, and 200-week moving averages, according to K33. In a Tuesday report, K33 noted that every time Bitcoin reclaimed all four major averages before now, it happened after the market had already established its cycle low.

Trump meets Xi: Why markets are watching this summit so closely

United States (US) President Donald Trump and Chinese President Xi Jinping are set to meet in Washington on Thursday for a summit closely watched by markets. After several months of easing trade tensions between the US and China, the meeting could determine whether the world's two largest economies extend their truce or enter a new period of uncertainty.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.