USD/CAD within range near 1.2850, FOMC eyed

The Canadian dollar is reclaiming some ground lost to its American neighbor today, taking USD/CAD to the current 1.2850 area.

USD/CAD focus on FOMC

The pair is so far snapping a 4-session positive streak since last week’s troughs in the mid-1.2600s. A better mood around the riskier assets and cautious trade surrounding the greenback are helping spot to retreat from earlier tops in the 1.2880 region.

Ahead in the NA session, the EIA’s weekly report on crude oil inventories is due followed by the key FOMC meeting.

With a rate hike already ‘off the table’ today, market participants will closely follow any changes in the ‘dot plot’ and the likeliness of a rate hike at the July meeting. According to CME Group’s FedWatch tool, the probability of higher rates next month is just above 20%.

USD/CAD significant levels

As of writing the pair is down 0.12% at 1.2854 facing the next support at 1.2655 (low Jun.8) ahead of 1.2590 (low Apr.20) and then 1.2458 (2016 low May 3). On the flip side, a breakout of 1.2952 (20-day sma) would open the door to 1.2985 (23.6% Fibo of 1.4692-1.2458) and finally 1.3145 (high May 30).