USD / CAD consolidates in a range around 1.2650 before the US CPI.

Get real time updates directly on you device, subscribe now.

  • A combination of factors cannot help the USD / CAD gain any significant traction.
  • Rising oil prices support the CAD and act as a tailwind for the pair.
  • A modest pullback in the USD is also helping to limit gains ahead of the US CPI report.

The pair USD / CAD struggles to capitalize on its modest intraday gains, moving within a range around the 1.2650 level during the European session on Tuesday.

The pair has achieved some positive traction on Tuesday and has recovered some of the previous day’s decline from near the 1.2700 level. However, a combination of factors has prevented the bulls from opening aggressive positions and limited any significant gains for the USD / CAD pair.

The WTI crude moves higher for the third day in a row and has reached the highest level since August 3, near the $ 71.00 region, amid concerns that another storm could affect production on the US Gulf Coast. This could prop up CAD, currency pegged to commodity prices, and act as a headwind for the USD / CAD pair.

Secondly, the US dollar has drifted further away from the two-week highs hit on Monday, which could further limit any significant rise in the pair. USD bulls have moved on the sidelines and prefer expect a new catalyst in the release of consumer inflation figures on Tuesday in United States.

The US CPI report will be scrutinized for new clues as to the likely timing of the Fed’s downsizing plan. This, in turn, will play a key role in influencing the USD ahead of the FOMC’s monetary policy meeting on 20 to September 21 and will provide new directional momentum to the USD / CAD pair.

The producer price index US PPI for August posted the largest gain since November 2010 and indicated that higher inflation could persist for some time. A stronger impression of the CPI in the United States will reaffirm expectations of an imminent announcement from the Fed and could boost the USD.

However, the fundamental backdrop makes it prudent to wait for a few continuation buys before positioning for any further gains. Even from a technical perspective, the inability of the USD / CAD pair to regain the round 1.2700 level warrants some caution for aggressive bulls.

USD / CAD technical levels

.
Source Link

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.