The USD/CAD pair trades slightly higher near 1.3653 in the early European session on Wednesday. The pair gains modestly as the US Dollar (USD) edges up ahead of the Federal Open Market Committee (FOMC) Minutes scheduled for 19:00 GMT.
At the time of writing, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, rises about 0.1% to around 97.20.
Market participants are watching the FOMC Minutes for further clarity on the Federal Reserve’s monetary policy outlook. At its January meeting, the Fed paused its easing cycle and kept interest rates unchanged within the 3.50%–3.75% range.
Meanwhile, the Canadian Dollar (CAD) remains relatively steady after Tuesday’s weakness. The currency came under pressure following the January Consumer Price Index (CPI) report, which showed moderate price growth. Canada’s annual headline inflation eased to 2.3% year-on-year, slightly below expectations of 2.4%.
USD/CAD Technical Analysis
At the time of publication, USD/CAD trades near 1.3655. The pair is hovering around the 20-day Exponential Moving Average (EMA) at 1.3654, which has flattened after a prior decline. The easing slope suggests fading bearish momentum and turns the EMA into a near-term pivot level.
The 14-day Relative Strength Index (RSI) stands near 48, indicating neutral market conditions.
A decisive daily close away from the 20-day EMA is needed to confirm direction. A sustained move above this level could push the pair toward the supply zone around 1.3740. If buyers maintain control above 1.3740, the next target may be the 1.3800 psychological level. On the downside, the 1.3500 area remains an important support.
