USD/CAD Daily Price Forecast – USD/CAD Trades Range bound Ahead of US FOMC Update

The USD/CAD pair was trading in a range bound fashion across Thursday as overnight gains fizzled out with CAD managing to hold steady against US Greenback and dragged the pair below 1.3100 handle for second consecutive trading session despite the pair managing to move back above 1.3100 mark. The pair failed to capitalize on overnight goodish rebound from closer to weekly lows, with a positive tone around crude oil prices underpinning the commodity-linked currency – Loonie and exerting some fresh downward pressure on the major ahead of US FOMC update, the pair is expected to see neutral/subdued price action. As of writing this article, the USD/CAD pair is trading at 1.3100 handle down by 0.10% on the day.

Divided Congress is Likely to Dampen US Greenback’s Momentum in Broad Market

Meanwhile, investors looked past the US midterm election results and a goodish pickup in the US Treasury bond yields helped revive the US Dollar demand, albeit did little to provide any fresh bullish impetus as market has already priced in the outcome of mid-term election and continued hike in US treasury yields supported by fed rate hikes. But USD is expected to continue subdued price action against Canadian Loonie as divided house makes it difficult for US President Trump to enforce his policies and continue forward with his “America First” approach as democratic party is expected to dig into President Donald Trump’s Russian ties and allegations of rigged up presidential election results. It would now be interesting to see if bullish traders continue to show resilience below 100-day SMA or the current pull-back marks the end of the pair’s recent uptrend from over four-month lows, touched on October 1.

Moving ahead, today’s key focus will be on the latest FOMC monetary policy update, where the central bank is widely anticipated to maintain status-quo but indicate that it remains on track to raise interest rates for the fourth time this year in December. Any subsequent weakness below the 1.3080-70 region (100-DMA) might continue to find support near mid-1.3000s, which if broken is likely to accelerate the fall back towards the key 1.30 psychological mark. On the flip side, the 1.3125 region now seems to have emerged as an immediate resistance and is closely followed by the 1.3160-65 supply zone, above which the pair is likely to aim towards reclaiming the 1.3200 handle.