USD/CAD has been quite volatile and corrective, residing at the edge of 1.2950 area with a daily close. Ahead of the high impact US economic events today, certain volatility and spikes may be observed in the market as USD has been quite mixed with the recent economic results.
Today the Federal Funds Rate is expected to increase to 2.25% from the previous value of 2.00%. Therefore, volatility in the market may increase. The rate hike is quite imminent and expected to weaken USD for certain period while strengthening in the longer term. Moreover, FOMC Economic Projections, FOMC Statement and FOMC Press Conference are also expected to play a vital role for the upcoming definite pressure in the market. Additionally, today the US New Home Sales report is going to be published which is expected to increase to 630k from the previous figure of 627k and the Crude Oil Inventories is expected to increase to -0.7M from the previous figure of -2.1M.
On the other hand, today Canada will not release any key reports to impact the market momentum while on Friday CAD GDP report is going to be published which is expected to increase to 0.1% from the previous value of 0.0% and Bank of Canada Governor is also going to speak about the upcoming policies and key interest rate decisions which is also expected to play a vital part in the process.
As of the current scenario, the rate hike scenario of US had weakened its currency in the earlier events whereas this time is also expected to have same result. If US manages to provide better development results throughout the event today, certain gain on the USD is expected or else CAD is expected to dominate further in the pair.
Now let us look at the technical view. The price is being held by the dynamic levels of 20 EMA, Tenkan and Kijun line while residing at the edge of 1.2950 area from where it is expected to push lower towards 1.2750 support area in the coming days. As the price remains below 1.3050 area, the bearish bias is expected to continue.
SUPPORT: 1.2750
RESISTANCE: 1.3050
BIAS: BEARISH
MOMENTUM: VOLATILE
