- WTI trades in tight range near $59 handle on Wednesday.
- US Dollar Index struggles to find direction ahead of FOMC’s policy announcements.
- Coming up: US inflation report and Canadian Capacity Utilization data.
The USD/CAD pair is trading in an extremely narrow range on Wednesday as investors are refraining from making large bets while waiting for the macroeconomic data releases and the FOMC’s policy announcements. As of writing, the pair was up 0.09% on a daily basis at 1.3237.
The crude oil’s performance and the broad-based USD weakness caused the pair to close the first two trading days of the week in the negative territory. Following Friday’s sharp upsurge, the barrel of West Texas Intermediate (WTI) staged a deep correction on Monday but didn’t have a difficult time erasing its losses supported by the OPEC+ decision to deepen the oil output cut by 500,000 barrels per day. Ahead of the Energy Information Administration’s (EIA) weekly crude oil stock report, the WTI is moving sideways near $59.
Eyes on data and FOMC
In the early trading hours of the American session, the Consumer Price Index (CPI) data from the US and the Capacity Utilization reading from Canada will be looked upon for fresh impetus.
However, the pair’s reaction to these comments or to changes in crude oil prices after the EIA report is unlikely to cause the pair to fluctuate sharply ahead of the FOMC event.
“Barring unfavourable developments on the trade front in the coming days, we doubt the Fed 2020 central tendency GDP growth projection will be significantly altered, allowing the FOMC to remain “watchfully waiting” as Cleveland Fed president Loretta Mester put it,” said NBF analysts. “Our base case scenario remains for the target range to be left unchanged at 1.50 to 1.75%.”
Technical levels to watch for
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