- USD/CAD was seen consolidated the previous session’s post-FOMC slump.
- Bullish oil prices underpinned the loonie and failed to provide any respite.
- Traders now eye US PPI figures, speech by BoC’s Poloz for a fresh impetus.
The USD/CAD pair was seen oscillating in a narrow trading band through the Asian session on Thursday and consolidated the overnight slump back closer to monthly lows.
The pair finally broke down of its two-day-old consolidative trading range and came under some intense selling pressure on Wednesday in reaction to a dovish assessment of the latest FOMC monetary policy update.
Weighed down by bullish oil prices
As was widely expected, the Fed left interest rates unchanged and indicated that rates would remain on hold. The Fed also reiterated its accommodative policy stance, which exerted some heave pressure on the US dollar.
This coupled with a late pickup in crude oil prices provided an additional boost to the commodity-linked currency – loonie and further collaborated to the pair's sharp intraday slide of around 80 pips.
The post-FOMC USD bearish pressure now seems to have abated, albeit the prevalent bullish tone surrounding oil prices continued weighing on the pair, with bears now eyeing a sustained weakness below mid-1.3100s.
Moving ahead, market participants now look forward to the release of the US Producer Price Index (PPI) figures. This will be followed by a scheduled speech by the BoC Governor Stephen Poloz and provide some fresh impetus.
Technical levels to watch
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