USD/CAD flat near 1.3080, FOMC eyed
- The pair is prolonging the sideline trading in the 1.3080 region.
- CAD recovered some ground following Monday’s YTD tops.
- FOMC meeting next of relevance. Later in the week, BoC and CPI.
After reaching fresh 2018 tops above 1.3100 the figure on Monday, USD/CAD met some sellers and receded towards the current 1.3080 region.
USD/CAD looks to FOMC, BoC, data
The pair is struggling for direction on Tuesday following yesterday’s daily retracement after climbing as high as the 1.3130 region, recording at the same time fresh 2018 peaks.
Despite the correction lower, spot so far manages to keep the trade in the upper end of the recent range ahead of the key FOMC gathering due tomorrow. The Fed is seen hiking rates by 25 basis points on Wednesday, and this should prompt US-CA yield spreads to widen further in favour of the buck.
Looking ahead, CAD should stay wary of the speech by Deputy Governor C.Wilkins on Thursday and the publication of key inflation figures and Retail Sales in the Canadian economy on Friday.
In the broader picture, US tariffs, the NAFTA, the somewhat cooling of the economy and the cautious stance from the Bank of Canada are poised to drive the sentiment around CAD.
USD/CAD significant levels
As of writing the index is losing 0.04% at 1.3072 and a breach of 1.2968 (10-day sma) would expose 1.2927 (50% Fibo of the 2017 drop) and finally 1.2867 (21-day sma). On the other hand, the next up barrier is located at 1.3126 (2018 high Mar.19) seconded by 1.3203 (resistance line off 2016 top) and finally 1.3349 (high Jun.21 2017).