USD/CAD slides back closer to mid-1.3100s ahead of US/Canadian macro data, FOMC

A combination of factors prompted some fresh selling around USD/CAD on Wednesday.
The risk-on mood dented the greenback’s relative safe-haven demand ahead of FOMC.
A strong rally in oil prices underpinned the loonie and contributed to the intraday slide.

Haresh Menghani FXStreet

The USD/CAD pair remained depressed through the early European session and was last seen hovering near daily lows, around the 1.3165-60 region.

The pair continued with its struggle to find acceptance/build on the momentum beyond the 1.3200 mark and witnessed a modest intraday pullback from the top end of a one-week-old trading range. The downtick was sponsored by a combination of factors – the prevalent selling bias around the US dollar and a strong pickup in crude oil prices.

The global risk sentiment remained well supported by the latest optimism over a potential vaccine for the highly contagious coronavirus disease. This coupled with expectations of a dovish Fed further weighed on the greenback and contributed towards capping gains for the USD/CAD pair, instead prompted some selling at higher levels.

Apart from the USD weakness, a strong intraday rally in crude oil prices underpinned the commodity-linked currency – the loonie – and contributed to the intraday slide. The downside, however, is likely to remain limited as investors might refrain from placing aggressive bets ahead of the highly anticipated FOMC monetary policy decision.

Even from a technical perspective, the USD/CAD pair has been oscillating in a range over the past one week or so. This further warrants some caution for aggressive traders and positioning for a firm near-term direction.

Heading into the key central bank event, the release of the US Monthly Retail Sales and Canadian consumer inflation figures will be looked upon for some short-term trading opportunities during the early North American session.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3157
Today Daily Change	-0.0029
Today Daily Change %	-0.22
Today daily open	1.3186

Trends
Daily SMA20	1.3145
Daily SMA50	1.3301
Daily SMA100	1.3523
Daily SMA200	1.352

Levels
Previous Daily High	1.3202
Previous Daily Low	1.3135
Previous Weekly High	1.326
Previous Weekly Low	1.3053
Previous Monthly High	1.3451
Previous Monthly Low	1.302
Daily Fibonacci 38.2%	1.3177
Daily Fibonacci 61.8%	1.3161
Daily Pivot Point S1	1.3147
Daily Pivot Point S2	1.3107
Daily Pivot Point S3	1.3079
Daily Pivot Point R1	1.3214
Daily Pivot Point R2	1.3242
Daily Pivot Point R3	1.3282

Author

Haresh Menghani

FXStreet

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

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