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Powell and his gang have hinted that they’re not planning something bigly to stimulate the economy anytime soon. Not surprisingly, the prospect of the Fed’s printers not going BRRRRR more aggressively than they currently are has sent the dollar higher across the board.

Can dollar bulls maintain their momentum in the next trading sessions?

Before we look at USD/CAD’s setup, check out the top-tier reports that you may have missed:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • BOJ’s presser due today
  • OPEC and friends to discuss production policies
  • Switzerland’s trade balance at 6:00 am GMT
  • Italy’s trade balance at 8:00 am GMT
  • BOE’s monetary policy announcement at 11:00 am GMT
  • Canada’s ADP non-farm employment change at 12:30 pm GMT
  • U.S. Philly Fed index at 12:30 pm GMT
  • U.S. initial jobless claims at 12:30 pm GMT

What to Watch: USD/CAD

USD/CAD 1-hour Forex Chart
USD/CAD 1-hour Forex Chart

A dovish BOC and a bit of profit-taking for high-yielding currency traders have pushed USD/CAD higher, enough for the pair to now trade above a trend line that had held as resistance since mid-July.

Are we looking at a reversal in the making? Now that the Fed has hinted that it’s not planning on releasing any policy bombshells anytime soon, traders are free to buy the safe haven in times of uncertainty. It also doesn’t hurt that USD/CAD’s upswing is supported by last week’s SMA crossover and a rising trend line on the 1-hour time frame.

Today’s OPEC meetings could further accelerate USD/CAD’s gains. Recall that the crude oil gang has lowered its demand forecasts for 2020 and its economic outlook for 2021 earlier this week.

If uncertainty over the wide-scale availability of vaccines and the pace of global economic growth isn’t enough to spook OPEC leaders against scaling back their production cuts, then we could see USD/CAD make new September highs.

If OPEC and its friends roll back their back-to-growth production plans, however, then the Loonie could see enough gains to drag USD/CAD back to its trend line support.

What do you think? Will the U.S. dollar maintain its bullish momentum against the Loonie?