USD/CAD holds up above 1.2300

• USD/CAD little changed on the day
• FOMC, Canadian GDP data eyed

USD/CAD pulled back from its European session highs and entered a consolidative phase over the last hours, as investors adopt a wait-and-see mode ahead of economic events in both US and Canada. In the US, the Fed will decide on monetary policy tomorrow while in Canada, GDP will be released on Wednesday.

USD/CAD fell nearly 70 pips from a daily peak of 1.2378 and touched a low of 1.2309 before finding support. From there, the pair moved slightly higher to currently trade around 1.2327, still 0.09% below its opening price.

“Month end rebalancing flows should be CAD-supportive, however we remain cautious on the basis of elevated interest rate differentials with the 2Y U.S.-Canada spread hovering around 30bpts at levels last seen in December,” said analysts at Scotiabank.

USD/CAD levels to watch

In terms of technical levels, next supports are seen at 1.2300 (psychological level/Jan 29 low), 1.2281 (Jan 25 low) and 1.2197/1.2200 (Sep 20 low/psychological level). On the upside, resistances line up at 1.2392 (10-day SMA), 1.2426/30 (Jan 24 high/20-day SMA) and 1.2490 (Jan 23 high).