FX markets are in a holding pattern as they await the results of this afternoon’s FOMC meeting and Fed Chair Jerome Powell’s press conference.  A rate hike looks to be a done deal. Possible tweaks, statement tone and guidance are the concerns.

EURUSD marched higher from September 10 and has been consolidating those gains in a 1.1720-90 range this week, suggesting traders believe the FOMC will err on the dovish side, possibly dropping the reference from accommodative “monetary policy” in the statement

However, the Fed could also downplay risks to the economy from trade wars, etc, while forecasting a faster pace of rate hikes which would knock EURUSD for a loop.

The major G-10 currency pairs opened close to unchanged this morning. In Asia, NZDUSD rallied on improved Business Confidence while ignoring a wider Trade deficit.  The gains were not sustained.  AUDUSD track the Kiwi moves.   USDJPY marked time in a 112.76-113.01 range, underpinned by firm US Treasury yields.  GBPUSD has recovered nearly 50% of its losses after the EU rejected Theresa May’s Brexit plan and traded in a narrow 1.3152-1.3182 band overnight.

USDCAD shrugged off a slew of negative Nafta headlines yesterday.  US Trade Representative Robert Lighthizer said that the US wants “to have an agreement with Canada” but then said, “The fact is, Canada is not making concessions in areas where we think they are essential.”  He also said the US would go ahead with a bilateral deal with Mexico if Canada is not on board.

The only data this morning is US New Home Sales for August which are forecast to rise 0.5%, m/m

USDCAD Technical Outlook

The intraday USDCAD technicals are mixed.  Prices are consolidating inside a 1.2930-1.2970 range with a break either side worth 0.0050 points.  Longer term, the uptrend line from February comes into play in the 1.2870-80 zone while 1.3210 caps the top side.  For today,  USDCAD support is at 1.2930 and 1.2880.  Resistance is at 1.2970 and 1.3020.

Today’s Range 1.2920-1.3020