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USD/CAD recovers to 1.1130

FXStreet (Edinburgh) - After recent dips to the 1.1080 region, USD/CAD has managed to not only regain the 1.1100 handle but also to print session highs just below 1.1130.

USD/CAD reverts losses post-FOMC

Spot is now looking to regain ground lost after Wednesday’s dovish tone from the FOMC minutes hammered the greenback, sparking a deep sell off from the 1.1210/20 band to today’s lows in the area of 1.1080. Data wise, US Initial Claims remained almost unchanged at 287K in the week ended on October 3rd vs. 288K in the previous week; the less relevant New Housing Price index in Canada rose 0.3% inter-month in august, surpassing both forecasts and previous print. Shaun Osborne, Chief FX Strategist at TD Securities, noted “we think the market is liable to push lower to the 1.10 area (40-day MA), perhaps even the mid 1.09s to retest the 200-day MA. Intraday, the USD has found support in the upper 1.10 area so far but we are not convinced the rebound can extend much above 1.1120 for now. We would rather fade USD gains through the low/mid 1.11 area currently”.

USD/CAD relevant levels

As of writing the pair is gaining 0.05% 1.1113 with the next up barrier at 1.1171 (Tenkan Sen) ahead of 1.1200 (psychological level) and then 1.1265 (high Oct.3). On the downside, a breach of 1.1071 (low Oct.2) would target 1.1056 (low Sep.25) en route to 1.1053 (low Sep.24).

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