Canadian dollar struggles to rise alongside oil – MarketPulse

USD/CAD little changed ahead of FOMC decision

• Canadian dollar was fourth-worst performer in the Group-of-10 currencies.
• Oil rallies on improved global outlook and Chinese stimulus
• Gold awaits the Fed decision

Commodities and some commodity currencies caught a bid after China policymakers signaled more stimulus would soon help their struggling recovery, but that didn’t help the Canadian dollar.  Canada’s largest export has seen oil prices catch a bid over the past month, while the loonie has appreciated but mainly been rangebound over the past week.  It looks like FX traders are locked in with the Fed day.  USD/CAD has been consolidating between the 1.3150 to 1.3250 range over the past week.  If risk appetite remains in place post-FOMC decision, the Canadian dollar could make a run towards the 1.3000 level.  A hawkish surprise by the Fed could support an initial above 1.3250 , with 1.34 providing short-term resistance.

Oil

Crude prices are rising after the IMF raised their World GDP forecast from 2.8% to 3%.  The outlook for global growth is the key for the crude demand outlook and right now it seems that might only get better as we get more stimulus out of China and as soft landing hopes grow for the US.  WTI crude will likely face key resistance from the $80 level, which means the recent rally might consolidate until we get beyond the FOMC decision.

Gold

Gold prices are wavering ahead of the FOMC decision, slightly higher on the day as the $1950 level provides key support.  Gold is going to wander around for the next 24 hours as nothing else really matters except the Fed.  Massive earnings might provide a key catalyst for risk-appetite, so bullion traders might want to pay attention to what happens to Microsoft and Alphabet earnings.

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Ed Moya

Senior Market Analyst, The Americas at OANDA

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.

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• Source: https://www.marketpulse.com/newsfeed/canadian-dollar-struggles-to-rise-alongside-oil/emoya