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The US dollar strengthened across the board as the FOMC meeting began.
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Risk aversion weighs on the Canadian dollar.
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USD/CAD again finds support in the 1.2815/30 area.
The USD/CAD rebounded sharply after hitting 1.2814, the lowest level in six weeks. It printed a fresh daily high at 1.2888, boosted by a stronger US Dollar across the board.
Dollar wakes up
The dollar is on the upside after three straight days of decline. It came as the FOMC began its two-day meeting, amid deteriorating market sentiment. The Fed is expected to raise rates by 75bp, as it did in June. “By doing so, the Committee will bring the policy position to its unbiased estimate. We also look for Chair Powell to maintain discretion, leaving the door open for an additional 75bp rate hike”, said analysts at TD Securities.
On Wall Street the Dow Jones is falling by 0.66% and the Nasdaq is declining by 1.75%. Crude oil prices are losing more than 0.50% after being unable to hold onto gains. The DXY is up 0.65%, back above 107.00.
Technical outlook
The decline of the USD/CAD found support at 1.2815 and rebounded above 1.2850 like what happened back late in June. A daily close clearly below 1.2845 should open the doors to more losses.
The pair’s rebound could point that a short-term bottom is in place. Near 1.2900 is the immediate resistance, followed by the 1.2945/50 area that also contains the 20-day moving average.
Technical levels
USD/CAD
