Usdcad Inches Higher

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Usdcad Inches Higher

Usd/Cad Inches Higher Amid Bearish Oil Market

The USD/CAD pair seems to be recovering from the 1.3625 level and has managed to stage a modest turnaround. The USD/CAD was near 1-month lows on Tuesday and has now managed to break its 2-days losing streak.

Despite the recovery, the USD/CAD is still below the 1.3700 resistance. This is a sign that the traders are hesitant to place any big bullish traders as the Canadian inflation is just around the corner.

The Canadian headline CPI is expected to decline for the 2nd month in a row. This will encourage the BoC to adopt a more accommodative policy as the labor market is now lagging behind.

Usd/Cad Faces Resistance At 1.3800

So if the BoC changes its policy, it will affect the Canadian Dollar (CAD) negatively. If that happens, the USD/CAD will likely turn higher and even cross the 1.3700 and 1.3800.

Amidst all of this, crude prices have gone down, which has also affected the commodity-linked CAD. In addition, the US Dollar has rebounded in the short term, which also points to more upside for the USD/CAD.

Meanwhile, the chances of the Federal Reserve starting its rate-cutting cycle have gone up. Almost everyone agrees that the US Federal Reserve will change its policy starting from September 2024.

However, an early action from the US Federal Reserve with the BoC still on the sidelines means a downside for the USD/CAD.

Moreover, it seems that the USD/CAD traders will likely wait for more cues on the next actions from the Federal Reserve before making any new traders.

That's why the next key catalyst for the USD/CAD will be the FOMC July meeting minutes. Jerome Powell will also be delivering a speech that can have a major impact on the USD/CAD pair.

Overall, the economic calendar remains packed with high-intensity events and data releases. That's why it is safe to assume that the USD/CAD will go through high volatility this week.

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