August 18, 2021

Daily U.S. Session Watchlist: USD/CAD

 We’ve got the Canadian CPI and FOMC minutes lined up for today!

Will this bring enough volatility for a USD/CAD pullback?

Before moving on, ICYMI, today’s Asia-London session watchlist checked out a potential bearish pullback on NZD/CAD after the RBNZ decision. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

RBNZ kept interest rates on hold vs. projected hike to 0.50%

Fed official Kashkari: Reasonable to taper this year or early 2022

Germany reports highest daily increase in COVID-19 cases in nearly three months

Upcoming Potential Catalysts on the Economic Calendar:

Canadian inflation figures at 12:30 pm GMT

U.S. crude oil inventories at 2:30 pm GMT

FOMC meeting minutes at 6:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: USD/CAD

This pair has been cruising higher inside a rising channel with its higher lows and higher highs on the 1-hour chart.

The channel top seems to be holding as resistance, likely pushing USD/CAD back to nearby support areas to gather more bullish energy.

Are buyers ready to hop in soon?

Using the Fib tool shows that the 61.8% level lines up with the channel bottom to add to its strength as a floor while the 50% level coincides with a former resistance zone.

Stochastic is suggesting that the correction could keep going for now, as the oscillator has a bit of room to move south before reaching the oversold region.

The moving averages are hinting at a continuation of the uptrend, as the 100 SMA just crossed above the 200 SMA. If any of the Fibs are able to keep losses in check, USD/CAD could recover to the swing high and beyond!

Of course this might boil down to the upcoming catalysts, which include CPI readings from Canada and the highly-anticipated FOMC meeting minutes.

Cautious remarks from the U.S. central bank are already expected, so any hawkish hints might be enough to send the dollar rallying. Also keep in mind that risk-off flows stemming from geopolitical risks would likely favor the safe-haven dollar.