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.
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