USD/CAD consolidates below 1.2200 mark, awaits Canadian CPI/FOMC

Expectations for a less dovish Fed acted as a tailwind for the USD and extended some support to USD/CAD.
The ongoing bullish run in oil prices underpinned the loonie and kept a lid on any meaningful gains for the pair.
Market participants look forward to Canadian consumer inflation figures for some impetus ahead of the FOMC.

Haresh Menghani FXStreet

The USD/CAD pair bounced around 15-20 pips from the early European session lows and was last seen hovering near the top end of its daily trading range, just below the 1.2200 mark.

A modest downtick in the US Treasury bond yields kept the US dollar bulls on the defensive through the first half of the trading action on Wednesday. However, expectations for a less dovish Fed helped put a tentative floor under the greenback and extended some support to the USD/CAD pair.

Investors now seem to have started pricing in the prospects for an earlier stimulus withdrawal amid worries about rising inflationary pressure. The concerns were further fueled by Tuesday's US Producer Price Index, which rose 0.8% MoM in May and accelerated 6.6% on a yearly basis.

Meanwhile, the supporting factor, to some extent, was offset by the prevalent strong bullish sentiment surrounding crude oil prices, which tend to underpin the commodity-linked loonie. This, in turn, seemed to be the only factor that might cap any meaningful upside for the USD/CAD pair.

Investors might also prefer to wait on the sidelines ahead of the highly-anticipated FOMC policy decision, due later during the US session. This will play a key role in influencing the USD price dynamics in the near-term and provide a fresh directional impetus to the USD/CAD pair.

Heading into the key event risk, traders will confront the release of the latest Canadian consumer inflation figures. This, along with crude oil prices, will be looked upon for some meaningful trading opportunities during the early North American session.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2186
Today Daily Change	0.0003
Today Daily Change %	0.02
Today daily open	1.2183

Trends
Daily SMA20	1.2094
Daily SMA50	1.2249
Daily SMA100	1.2442
Daily SMA200	1.2725

Levels
Previous Daily High	1.2204
Previous Daily Low	1.213
Previous Weekly High	1.2178
Previous Weekly Low	1.2057
Previous Monthly High	1.2352
Previous Monthly Low	1.2013
Daily Fibonacci 38.2%	1.2176
Daily Fibonacci 61.8%	1.2158
Daily Pivot Point S1	1.2141
Daily Pivot Point S2	1.2098
Daily Pivot Point S3	1.2066
Daily Pivot Point R1	1.2215
Daily Pivot Point R2	1.2247
Daily Pivot Point R3	1.229

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold traders seem noncommittal below $4,350; eyes Fed rate decision

Gold clings to modest intraday gains through the first half of the European session, albeit it lacks follow-through buying and remains below $4,350. The US Dollar eases from a two-week high amid some profit-taking, offering support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key central bank event risk.

Cardano's bearish breakout warns of a 15% downside risk

Cardano (ADA) hovers around $0.1900 at press time on Wednesday after a 6% decline the previous day, breaking below a crucial support level. Declining on-chain activity across the Cardano ecosystem, with reduced transaction count and Real Economic Value (REV), suggests waning user demand.

Fed decision in focus

Starting with the most important, the Fed decision. Heading into the event, data showed a rather punchy US August jobs report, which, you will likely recall, triggered a hawkish Fed rate repricing in rates markets. However, the recent US August CPI print mattered more.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.