The US dollar to Canadian dollar exchange rate, currently at 1.34267, experiences a slight decrease as investors adopt a wary stance ahead of the Federal Reserve’s policy decision.

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• USD/CAD delivers a modest correction as investors remain cautious ahead of Fed policy.

The pair currently trades last at 1.34267.

The previous day high was 1.349 while the previous day low was 1.3379. The daily 38.2% Fib levels comes at 1.3422, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3448, expected to provide resistance.

The USD/CAD pair remained subdued on Wednesday as investors await the monetary policy decision from the Federal Reserve (Fed). The Lonnie asset faces a nominal correction amid the rangebound US Dollar Index (DXY).

The USD Index corrects to near the crucial support of 105.00 as investors hope that the Fed will deliver a neutral interest rate policy, keeping interest rates unchanged at 5.25-5.50%. However, a hawkish interest rate outlook cannot be ruled out as remaining inflationary pressures in excess of the desired rate are most sticky.

The S&P500 is expected to open on a positive note, considering bullish cues from overnight funds. Meanwhile, investors would remain worried about the Fed policy as strong discussions about one more interest rate increase this year would trigger the risk-aversion theme and strengthen the US Dollar.

About the US economic outlook, US Treasury Secretary Janet Yellen on Monday said that she doesn’t see any signs that the economy will enter into a downturn as inflation is coming down and the labor market is quite strong. However, Yellen warned that a failure by Congress to pass the legislation to keep the government in control could elevate the risk of an economic slowdown.

Meanwhile, the Canadian Dollar strengthens as investors see further upside in the oil price on supply concerns due to production cuts by Saudi Arabia and Russia. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.

The Canadian Dollar remained volatile on Wednesday after a mixed inflation report for August. The annual headline inflation accelerated sharply to 4% against the estimates of 3.8% and the former release of 3.3%. The core CPI that excludes volatile oil and food prices expanded nominally by 0.1%, indicating subdued demand for non-durable goods and services. On an annualized basis, the core CPI rose to 3.3%.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3429 at the time of writing. Pair opened at 1.3448 and is trading with a change of -0.14 % .

The pair is trading below its 20 Daily moving average @ 1.3567, above its 50 Daily moving average @ 1.3423 , above its 100 Daily moving average @ 1.3401 and below its 200 Daily moving average @ 1.3464

The previous day high was 1.349 while the previous day low was 1.3379. The daily 38.2% Fib levels comes at 1.3422, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3448, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3388, 1.3328, 1.3277
• Pivot resistance is noted at 1.3499, 1.355, 1.361

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