USD/CAD Price Analysis: Remains topsy-turvy as focus shifts to Fed policy

The USD/CAD pair struggles to find direction as investors are awaiting the interest rate decision by the Federal Reserve (Fed) for further guidance. The Loonie asset is demonstrating wild moves in a limited territory as investors are uncertain about guidance for September monetary policy while an interest rate hike of 25 basis points (bps) for the July meet cannot be ruled out.

S&P500 futures look choppy in Europe amid caution ahead of Fed policy. In addition to that, corporate earnings will keep a stock-specific action active. The US Dollar Index (DXY) has corrected sharply to near 101.10 amid a cheerful market mood.

Meanwhile, the Canadian Dollar is expected to pick strength amid upbeat oil prices. Strong discussions about fresh stimulus in China have improved the demand for oil. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.

USD/CAD is auctioning in a Symmetrical Triangle on an hourly scale, which indicates a volatility contraction. Upward-sloping trendline of the aforementioned chart pattern is plotted from July 20 low at 1.3120 while the downward-sloping trendline is placed from July 18 high at 1.3243.

The 20-period Exponential Moving Average (EMA) at 1.3185 is sticky to the asset, portraying a directionless performance.

Meanwhile, the Relative Strength Index (RSI) (14) is trading in the 40.00-60.00 range, which indicates that investors await a potential trigger for further move.

A solid extension move above July 24 high at 1.3230 would drive the asset toward July 3 high at 1.3273 followed by July 10 high at 1.3304.

On the contrary, a downside move below July 25 low at 1.3147 would expose the asset to July 20 low at 1.3120 and July 14 low at 1.3093.

USD/CAD hourly chart