USD/CAD bounces off lows near 1.2740, FOMC eyed
- Spot tested lows around 1.2740.
- US-CA yields spread differentials keep ruling the sentiment.
- Attention to FOMC minutes.
After dropping as low as the 1.2740 region, USD/CAD managed to gain some attention and is now returning to the 1.2750/55 band.
USD/CAD focused on FOMC minutes, data
Spot is retreating for the second consecutive session so far on Wednesday, coming down after briefly testing fresh weekly tops in the 1.2820 area on Tuesday.
Yield spread differentials in the shorter end of the curve continue to drive the sentiment around spot, with US-CA 2-year spreads widening to multi-month highs in recent weeks.
In addition, another round of the NAFTA talks concluded on Tuesday without major headlines and leaving CAD somewhat vulnerable.
Looking ahead, nothing is expected in the Canadian docket ahead of tomorrow’s retail sales for the month of September. In the US, initial claims are next on tap seconded by October’s durable goods orders, the EIA’s weekly report and the FOMC minutes from the latest meeting.
USD/CAD significant levels
As of writing the pair is losing 0.15% at 1.2761 facing the initial support at 1.2664 (low Nov.19) followed by 1.2572 (100-day sma) and then 1.2546 (55-day sma). On the other hand, a breakout of 1.2838 (high Nov.21) would aim for 1.2927 (50% Fibo of the 2017 drop) and finally 1.2980 (200-day sma).