USD/CAD struggles near weekly lows, focus on Canadian GDP/FOMC

• Bullish Crude Oil prices continue to underpin Loonie and exert some pressure.
• The downside seems limited ahead of the highly anticipated FOMC decision.
• Wednesday’s US ADP report and Canadian GDP might also provide some impetus.

The USD/CAD pair traded with a mild negative bias through the early European session on Wednesday and dropped to fresh weekly lows, around the 1.3135 region in the last hour.

The continued with its struggle to build on the recent recovery move and once again failed ahead of the 1.3200 handle on Tuesday amid a goodish pickup in Crude Oil prices, which tend to underpin demand for the commodity-linked currency – Loonie.

Oil prices remained well supported on Wednesday in the wake of weekly American Petroleum Institute (API) data that showed a decline in the US stockpiles, which coupled with a modest US Dollar pullback, exerted some follow-through pressure on the major.

The downside, however, seemed cushioned, at least for the time being, as investors keenly await the outcome of the highly anticipated two-day FOMC monetary policy meeting, scheduled to be announced later during the US trading session on Wednesday.  

Heading into the key event risk, Wednesday’s economic docket – featuring the releases of the ADP report on the US private sector employment and monthly Canadian GDP growth figures,  will also be looked upon to grab some short-term trading opportunities.

Technical levels to watch