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:
- RBA emphasizes need for higher wages growth in subtle shift
- Thailand sticks with AstraZeneca vaccine after safety scare
- Oil falls amid stockpiling concern; European vaccine woe threatens demand
- Australia, NZ dollars tread water ahead of Fed policy decision
- Asian stocks follow Wall Street higher ahead of Fed meeting
- Japan to hike tariffs on U.S. beef as FY imports near limit: Kyodo
- BOJ’s Kuroda stresses need to keep yield curve ‘stably low’
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
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?