- USD/CAD was seen oscillating in a range through the first half of the European session.
- Retreating oil prices extended some support, a modest USD weakness capped the upside.
- Investors await BoC policy decision and Fed Chair Powell’s testimony for a fresh impetus.
The USD/CAD pair struggled for a firm direction and remained confined in a range around the key 1.2500 psychological mark through the first half of the European session.
A combination of diverging forces failed to assist the USD/CAD pair to capitalize on the previous day's strong positive move, instead led to a subdued/range-bound price action on Wednesday. A modest pullback in crude oil prices undermined the commodity-linked loonie and extended some support to the major.
However, a softer tone surrounding the US dollar kept a lid on any meaningful upside for the USD/CAD pair. Investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the Bank of Canada monetary policy decision, due later during the early North American session.
This will be followed by the post-meeting BoC press conference and the Fed Chair Jerome Powell's semi-annual testimony before the House Financial Services Committee. Powell's remarks on the latest inflation figures should influence market expectations about the Fed's policy outlook and drive the USD in the near term.
Investors have been pricing in the prospects for an earlier than expected monetary policy tightening by the Fed, which was reinforced by Tuesday's stronger US CPI prints. Powell's comments may offer clues about the likely timing of tapering/interest rate hikes and provide a fresh directional impetus to the USD/CAD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.