USD/CAD clings to gains near 1.3440 ahead of FOMC

After reaching highs near 1.3460 during overnight trade, USD/CAD has now receded some ground and is back to the 1.3445/40 band.

USD/CAD attention to oil, FOMC

The pair has recovered the smile today following yesterday’s pullback, as CAD strength appears mitigated after the recent correction lower in crude oil prices.

In fact, the barrel of West Texas Intermediate is now gaining smalls around the $52.50 area, down from fresh 19-month tops above the $55.00 mark seen on Tuesday.

In the meantime, the greenback continues its march north albeit at a slower pace ahead of the FOMC minutes due later in the NA session. Consensus, however, expects the minutes to come in on the hawkish side, adding to the broader USD buying interest.

Adding to CAD resilience, the latest CFTC report showed speculative net shorts have decreased to levels last seen in late September during the week ended on December 27.

USD/CAD significant levels

As of writing the pair is gaining 0.10% at 1.3439 facing the next hurdle at 1.3511 (high Dec.30) followed by 1.3575 (50% Fibo of the 2016 drop) and finally 1.3601 (high Dec.28). On the downside, a break below 1.3386 (low Jan.2) would aim for 1.3384 (20-day sma) and then 1.3311 (38.2% Fibo of the 2016 drop).