- USD / CAD is moving higher on Wednesday, approaching the 1.2100 level.
- The drop in oil prices weighs on the Canadian dollar and supports the rally in the pair.
- Pessimistic expectations from the Fed continue to act as a headwind for the USD and limit the pair’s gains.
- Investors turn to the Canadian CPI report for fresh momentum ahead of the FOMC minutes.
The pair USD / CAD is looking to extend the good bounce the day before from multi-year lows and is moving slightly higher, just below the 1.2100 level, during the European session on Wednesday.
Crude oil prices have extended the corrective decline the day before from highs of more than two months and have fallen below the $ 65.00 level on Wednesday. This has been seen as a key factor that has weighed on the Canadian dollar, a currency pegged to commodity prices, and has offered some support to the USD / CAD pair.
This, to a greater extent, has been seen offset by prevailing bearish sentiment around the US dollar, which has prevented investors from positioning themselves for a significant rally in the pair and limited any significant rally above the 1.2100 level for the USD / CAD pair, at least for the time being.
Chest the Fed’s stubbornly pessimistic view that any rise in inflation will be transitoryInvestors have been lowering their expectations of a tightening of their monetary policy ahead of schedule. This has continued to act as a headwind for the USD and has dragged it to the lowest level since January.
Therefore, the key focus will remain on the minutes of the last FOMC monetary policy meeting, to be published during today’s American session. Before the key event, the release of Canadian consumer inflation figures could provide some boost to the USD / CAD at the start of the American session.
From a technical perspective, the inability of the pair to register a significant recovery suggests that the short-term downtrend may still be far from over. That said, the oversold conditions on the short-term charts warrant some caution before opening new bearish positions.
USD / CAD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
