USD/CAD pair remains relatively calm during the Asian session and early London market. The pair is trading in a tight range between 1.3050 and 1.3065.
Market participants are awaiting Wednesday when the Federal Reserve and the Bank of Canada have their monetary policy meetings. The Fed is largely expected to cut rates by 25 basis points. This will be down from the current range of 1.75%-2.00%. It could mark an end to the central bank’s midcourse rate adjustments.
As a reminder, the majority of Fed policymakers (10 out of 17) expected no more rate cuts this year at their September meeting. Only eight expected one further cut in 2020. The Bank of Canada will likely hold rates steady at the current 1.75%.
The USD/CAD pair is staying calm ahead of the meetings.
Looking at technical indicators, the Average True Range hit multi-year lows and the RSI is just above oversold levels. This might flag the calm before the storm later this week.
We’re still looking at the July low of 1.3015 as an important mid-term support level, the break of which may send the pair lower to the 1.28xx levels (October 2018 lows), especially in the case of a more-than-expected dovish tone from the Fed.
On the other side, the September 10 low of 1.3134, which also acts as the neckline of the previously-formed double top pattern, remains a possible resistance level to keep an eye on.
Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.