USD / CAD is approaching multi-month lows, just above the 1.3200 mark

The USD/CAD remained under some selling pressure for the fourth consecutive day and remained at a remarkable distance of minimum and two-month lows touched in the previous session.

The pair continued its bearish fall from levels beyond the psychological mark 1.3500 last week and dropped more than 300 pips in just four trading sessions in the wake of BOC Governor Stephen Poloz's latest hawkish rhetoric and vice governor Carolyn Wilkins.

The comments reflect the central bank's confidence in the Canadian economy and suggest a change in its monetary policy outlook. Raising the odds of an increase in the BOC rate before the end of this year has been a key factor for the pair's depression since the beginning of this week.

Going forward, investors will remain focused on the highly anticipated announcement of the FOMC, later during the New York trading session. The Fed seems poised to raise interest rates by 25 basis points, but given the recent disappointment in US data, the accompanying statement could imply a more political path. Hatching expectations for a faster Fed adjustment cycle would make the US dollar vulnerable to extending its recent downward trajectory and continuing to put sales pressure on most of the pair.

Before the FOMC announcement, traders will face the latest IPC print data and monthly retail sales from the US, and take advantage of some short-term trading opportunities.

Technical levels to observe

A tracking through the weakness below the 1.3200 zone would lead to a subsequent fall below the 1.3185-80 horizontal support, and is likely to accelerate further fall towards its next support near the 1.3150-45 region.

On the other hand, any recovery movement beyond the area of ​​1.3240-45 now seems to face some new buying interest near the 1.3300 zone, which if cleared could trigger a short coverage rally towards 1.3385 before the 1.3400.

  

Fuente: fxstreet.com