The USD failed to capitalize on the overnight positive move and exerted some fresh pressure.
Even a goodish pickup in the US bond yields/weaker Crude Oil prices did little to inspire bulls.
Investors now look forward to Powell’s speech for a fresh impetus ahead of FOMC minutes.
The USD/CAD pair maintained its offered tone through the early European session on Wednesday and is currently placed at the lower end of its daily trading range, around the 1.3300 handle.
The pair failed to capitalize on the previous session’s late bounce from the very important 200-day SMA and once again faltered near the 1.3335-40 supply zone amid some renewed US Dollar selling bias. The latest developments on the US-China trade front threatened to derail already delicate trade negotiations and eventually weighed on the Greenback.
Renewed USD exerts some fresh pressure
It is worth mentioning that the US Administration on Tuesday imposed visa restrictions on Chinese officials over the treatment of Muslim minorities. This was followed by reports on Wednesday that China is planning tighter visa restrictions for US nationals with ties to anti-China groups, though China’s foreign minister was out quickly to deny the story.
Meanwhile, the USD bulls seemed rather unaffected by a goodish intraday pickup in the US Treasury bond yields, supported by a turnaround in the global risk sentiment. Even a weaker tone around Crude Oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, also did little to stall the pair’s intraday downtick.
Despite the pullback, the pair remains well within a broader trading range held over the past one week or so, making it prudent to wait for a sustained move in either direction before placing any aggressive bets. Market participants start repositioning for Wednesday’s release of the minutes of the latest FOMC monetary policy meeting on September 17-18.
Heading into the key event risk, the Fed Chair Jerome Powell’s scheduled speech might influence market expectations over the central bank’s policy outlook and produce some short-term trading opportunities later during the early North-American session amid absent relevant market-moving economic releases – either from the US or Canada.