USD/CAD drifts to new lows below 1.3600 awaiting Fed’s decision

• The US dollar hits fresh intra-day lows at 1.3575.
• A moderate recovery in Oil prices has favored the CAD.
• The pair remains looking for direction ahead of the Fed.

The US Dollar is extending losses in a calm European trading session with the market awaiting the outcome of the Fed’s monetary policy decision before placing significant bets.

In this context, the USD/CAD has pulled lower to reach intra-day lows at 1.3575 although the pair remains moving halfway through the last two weeks’ range.

A modest pick up in Crude prices, after the OPEC report raised its global growth economic forecasts, easing concerns about an oil glut in 2024 has provided some support to the oil-sensitive CAD.

On the other hand, US Inflation data released on Tuesday showed that consumer prices remain at levels well above the Fed’s 2% target. This, coupled with the strong US employment levels seen last Friday, has curbed speculation of a Fed pivot in early 2024, underpinning support for the Dollar.

USD/CAD is looking for direction

From a wider perspective, the pair remains trading sideways within a 75-pips range, after bouncing from 1.3480 lows earlier this month. Resistances are at 1.3625 and 1.3660. Support levels lie at 1.3550 and the mentioned 1.3480 low.

Technical levels to watch