#USDCAD @ 1.38701 continues to gain ground ahead of the FOMC policy decision.

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• USD/CAD continues to gain ground ahead of the FOMC policy decision.

The pair currently trades last at 1.38701.

The previous day high was 1.3892 while the previous day low was 1.3814. The daily 38.2% Fib levels comes at 1.3862, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3844, expected to provide support.

USD/CAD attempts to extend the gains for the second consecutive day on the back of improved risk appetite ahead of the US Federal Reserve (Fed) monetary policy decision. The spot price trades slightly higher near 1.3880 during the Asian session on Wednesday.

The US Dollar Index (DXY) received a boost from increased US Treasury yields on Tuesday, hovering around 106.70 with the 10-year US bond yield sitting at 4.90%, by the press time. Market sentiment leans towards the expectation that the US Fed will maintain the current interest rate at 5.5% in the Wednesday meeting. If there’s a hawkish statement from the Federal Open Market Committee (FOMC) regarding the future trajectory of interest rates, it could potentially strengthen the US Dollar (USD).

The conflict between Israel and Hamas has raised concerns about potential disruptions in the oil supply from the Middle East. Despite these worries, Crude oil prices have fallen to two-month lows putting pressure on the Canadian Dollar. Western Texas Intermediate (WTI) trades below $81.00 per barrel at the time of writing.

Additionally, on Tuesday, the disappointing data of the monthly Canadian GDP might have undermined the commodity-linked Loonie Dollar (CAD) and acted as a tailwind for the USD/CAD pair.

The release of Canada’s Gross Domestic Product (GDP) data from Statistics Canada on Tuesday, revealed that the economy experienced no growth, remaining flat at 0.0% in August. This result contradicts market predictions, which anticipated a 0.1% growth during the same period. Furthermore, S&P Global Manufacturing PMI will be eyed for gaining more cues on Canada’s economic scenario.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3876 at the time of writing. Pair opened at 1.3875 and is trading with a change of 0.01 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3714, 50 SMA 1.3619, 100 SMA @ 1.3454 and 200 SMA @ 1.3485.

The previous day high was 1.3892 while the previous day low was 1.3814. The daily 38.2% Fib levels comes at 1.3862, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3844, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3828, 1.3782, 1.375
• Pivot resistance is noted at 1.3907, 1.3939, 1.3985

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