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The dollar is gaining pips left and right ahead of the FOMC statement.

Will this lead to USD/CAD bouncing from a previous support level?

Before we talk setups, lemme show you the major headlines in the previous trading sessions:

Upcoming Potential Catalysts on the Economic Calendar:

  • 10:00 am GMT Eurozone ZEW economic sentiment
  • 10:00 am GMT German ZEW economic sentiment
  • 12:30 pm GMT U.S. retail sales
  • 1:15 pm GMT U.S. industrial production

What to Watch: USD/CAD

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

Doubts over the sustainability of the current global economic recovery pace have been weighing on crude oil prices so far this week.

It also doesn’t help the oil-related Loonie that traders are flocking to the safe-haven dollar ahead of the FOMC’s policy event tomorrow.

Today’s U.S. retail sales release could make things more interesting for USD/CAD’s prices.

A better-than-expected retail sales report would up the pressure on the Fed to taper its stimulus programs. This could push traders into buying safe havens like the dollar and provide USD/CAD the chance to bounce from its February lows.

A disappointing release, on the other hand, could extend USD/CAD’s downswing that may lead to USD/CAD making new monthly lows.

What do you think? Will USD/CAD bounce from its current consolidation? Or are USD/CAD bears just taking a breather?