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USD/CAD Daily Forecast – Waiting For Signals From The Fed

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USD/CAD Video 29.07.20.

U.S. Dollar Remains Under Some Pressure Ahead Of Fed Interest Rate Decison

USD/CAD continues to trade near 1.3360 as traders await the Fed Interest Rate Decision and subsequent commentary from Jerome Powell.

U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is trying to settle below the key support level at 93.5.

Currently, the U.S. Dollar Index is losing ground and has decent chances to settle below the support at 93.5 and gain additional downside momentum.

However, everything can change in a second if the Fed does not sound as dovish as the market wants it to be.

In this case, the U.S. dollar may experience a significant rebound, helped by the fact that the U.S. Dollar Index is clearly oversold.

Meanwhile, oil has settled above the $41 level, supported by a significant decrease in crude oil inventories. Oil’s relative strength provides some support to commodity-related currencies including the Canadian dollar.

Traders should expect that trading in USD/CAD will be rather calm ahead of the Fed Interest Rate Decision, with some attempts to move in either direction just ahead of the rate announcement.

However, the bigger move may happen when Jerome Powell will speak during the Fed Press Conference, half an hour after the rate announcement.

Technical Analysis

USD to CAD stays near 1.3360 after an unsuccessful attempt to get to the test of the support level at 1.3315. At this point, it looks like USD to CAD will need more U.S. dollar weakness to get to the test of this level.

In case USD to CAD settles below 1.3315, it will head towards the next support level at 1.3270.

On the upside, the nearest material resistance for USD to CAD is located at 1.3440, although it looks like USD to CAD faces some resistance near 1.3400.

In case USD to CAD manages to get above 1.3440, it will head towards the major resistance level at 1.3500. Along the way, USD to CAD could face resistance at the 20 EMA, which has declined to 1.3475.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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