USD/CAD: Probes weekly top beyond 1.3200, bulls in command

• USD/CAD seesaws around intraday high after printing the biggest gains in a week.
• Global markets turn risk-averse following the Fed’s reluctance to offer further stimulus.
• US dollar rally, WTI weakness and risk-off mood recall the buyers.
• US Jobless Claims, Canadian ADP Employment Change awaited for fresh impulse.

USD/CAD prints 0.40% intraday gain while trading near 1.3230 during the pre-European session on Thursday. The quote becomes no exception to the market’s major affection towards the US dollar after the previous day’s Federal Reserve (Fed) monetary policy meeting. Also please the pair buyers could be the weakness in oil prices, Canada’s biggest exports, as well as risk aversion that tames the commodity-linked currencies like the Canadian dollar (CAD).

The Federal Open Market Committee’s (FOMC) pause for further rate cuts joined the upwardly revised quarterly economic forecasts to suggest that the world’s key central bank may push brakes over the further easy money. The same disappointment market players since late- Wednesday and is playing the role by now.

While the equities are mourning over the Fed’s cautious optimism, commodities and the linked currencies are afraid of the US dollar’s gains. The US dollar index (DXY) adds over 0.33% to currently around 93.40 after rising to more than a one-week high of 93.60 before a few minutes.

Other than the greenback weakness, that weighs on the WTI oil prices, cautious sentiment ahead of the Organization of the Petroleum Exporting Countries (OPEC) and Russia, mostly known as OPEC+, also result in a 1.27% loss by the black gold to $39.89 now. Additionally, US President Donald Trump’s dislike for the World Trade Organization’s (WTO) favor for China rekindled fears of a fresh trade war, which in turn drags the energy benchmark.

Against this backdrop, stocks in Asia-Pacific and the S&P 500 Futures are down over 1.0% on average whereas the US 10-year Treasury yields drop one basis point to 0.679% as we write.

Looking forward, Canada’s monthly ADP Employment Change for August, expected 901.8K versus 1149.8K prior, will join the US weekly Initial Jobless Claims, forecast 850K against 884K previous readouts, to direct the short-term USD/CAD moves.

Technical analysis

FXStreet’s Ross J Burland spots inverse head-and-shoulders pattern on the four-hour chart to suggest further buying opportunity.

Read: USD/CAD Price Analysis: Bulls finally catching a break?