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The US dollar is modestly up amid higher US yields ahead of Fed’s meeting his week and key economic data. Equities and crude oil prices are able to trim previous losses during the US session.
The pair is trading at 1.3362 at the time of typing. So far, the USD/CAD pair is able to hold above 1.3300, while risks remain slanted to the downside. The USD/CAD pair has actually peaked during Monday’s US session at 1.3357, the highest level since Thursday. It is hovering around 1.3350, slightly away from the critical support area of 1.3300.
The January low around 1.3300 is the key level to the downside, any break lower could open the doors to an extension toward to 1.3220, last seen in November and the 200-day Simple Moving Average today at 1.3204. On the upside, a consolidation above 1.3360 would set the attention on 1.3400 and the 20-day SMA at 1.3420.
The US dollar is rising on Monday amid higher US yields and prevalent risk-off pulse. The 10-year Treasury yield stands at 3.54% and the 2-year at 4.26%, the highest since January 12. The Dow Jones is falling by 0.39% and the Nasdaq slides by 1.48%.
Price action remain limited on Monday ahead of some busy days. On Tuesday, Canada will report November GDP data, expected at 0%. Analysts at TD Securities look for a flat print on industry-level GDP with a muted performance across both goods and services with new flash estimates expected to show a modest expansion in December.” They point out the ultra sensitivity to data releases is on hold with the Bank of Canada moving towards a pause.
On the US front, the trading week will be busy, with the FOMC meeting concluding on Wednesday and the Non-farm payrolls report awaited on Friday. The Fed is expected to raise interest rates by 25 basis points. Fed’s outlook will be critical and could trigger volatility across the FX board.
