The USD/CAD pair rose during the Wednesday session in order to form a complete turnaround of the selloff on Tuesday. Nonetheless, we are still under the 0.98 handle, and until we break well above that we still consider this pair broken down.
With the Federal Reserve meeting later today, the announcement will certainly have a major affect on this pair. If the Federal Reserve eases and makes the markets have the, we should see the Canadian dollar rise in value which Woodson this pair lower obviously. However, there is a real risk of disappointment, and if we see that we could see quite a bit of a nasty snap higher. If we do manage to get above the 0.9950 level, we would start buying this pair aggressively as it would suggest a return to the top of the consolidation area at 1.04 or so.
However, if we break the lows from both Tuesday and Wednesday, this is a selling signal that has is aiming for the 0.95 handle. If we below that, we think 0.93 is the next stop.
Written by FX Empire