![](https://agilityforex.com/wp-content/uploads/2021/07/2822Jul21-slide.png)
Source: Pixabay
Asia equities defensive, European bourses rise, Wall St futures flat to higher
FOMC should be non-event, risk is its hawkish
Canada CPI rises 3.1% y/y, Core 2.7%
USDCAD open 1.2563-68, Overnight range, 1.2563-1.2603 Previous close 1.2603
FX at a Glance
![](https://agilityforex.com/wp-content/uploads/2021/07/28Jul21-Agilie-1024x447.png)
Source: IFXA/RP
FX Recap and outlook
The FOMC meeting statement and Chair Powell’s press conference will be underwhelming. There are no new projections, and nothing much happened since Powell testified before Congress. There hasn’t been “substantial further progress” in the past two weeks, suggesting today’s statement will mirror the previous one. The risk, and it is a low one, is if the statement alludes to a taper timeline.
Asia equity indexes followed Wall Street lower due to ongoing concerns about China’s stock market crackdown and spreading coronavirus infections. Australia’s New South Wales state extended the lock-in Sydney for another four weeks, while three Japanese prefectures seek a state of emergency.
European equity traders did not follow Asia’s lead. Better than expected US earnings reports from Alphabet, Microsoft and Apple, and hopes for a benign Fed meeting boosted the major indexes.
Wall Street equity futures are flat, gold prices are a tad softer and WTI oil is higher. US 10-year Treasury yields inched higher to 1.273%.
EURUSD traded in a 1.1793-1.1830 range and revisited the bottom of the band in NY EURUSD bulls are hoping the FOMC statement and press conference are deemed dovish, which will serve to offset bearish sentiment from the latest ECB monetary policy outlook. The EURUSD outlook is negative below 1.1850.
GBPUSD consolidated yesterday’s gains in a 1.3864-1.3894 band. The EU decision to negotiate with the UK over Northern Ireland border issues, the drop in UK COVID cases, and the IMF upgrade of 2021 UK growth to 7.0% from 5.3% in April are supporting prices. A break above 1.3910 puts the cross-hairs on 1.4000.
USDJPY is under pressure from weak US 10-year Treasury yields, domestic coronavirus outbreaks, and Asian safe-haven demand following China’s equity market woes. The Bank of Japan Summary of Opinions from the July 16 meeting noted that although the economy picked up, it is in a severe situation from COVID-19.
AUDUSD and NZDUSD drifted down, undermined by negative risk sentiment because of China and caution ahead of the FOMC meeting. AUDUSD gains after CPI rose 3.8% y/y, and eight year peak, were quickly erased, and it stayed on the defensive.
WTI oil rose to $72.57/barrel from $71.68/b following API reporting a 4.7 million barrel drawdown in US crude inventories.
USDCAD closed at the top of its overnight range then bounced in a 1.2562-1.2590 range in NY trading The earnings reports from Alphabet, Apple and Microsoft, and firmer oil prices undermined the currency. Canada headline CPI was a tick below the consensus forecast, rising 3.1% y/y rather than 3.2%. Core CPI was higher than expected, rising 2.7% which was above the estimates but below the May result.
The weighting’s in the CPI basket were tweaked to reflect the pandemic era
USDCAD technical outlook
The intraday USDCAD technicals are unchanged as prices have been stuck in a 1.2530-1.2605 range for 4 consecutive days. That should change after the FOMC meeting. A decisive break above 1.2610 targets 1.2725, while a move below 1.2510 suggests a test of 1.2410 support. For today, USDCAD support is at 1.2530 and 1.2510. Resistance is at 1.2610 and 1.2670. Today’s range 1.2520-1.2620
Chart USDCAD daily
![](https://agilityforex.com/wp-content/uploads/2021/07/28Jul21-usdcad-LV-1024x500.png)
Source: Saxo Bank
FX open, high, low, previous close
![](https://agilityforex.com/wp-content/uploads/2021/07/28Jul21-Agility-2.png)
Source: Saxo Bank