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Traders in anticipation of the Fed meeting

December 15, 2021

USD/CAD: The Canadian dollar weakened against the U.S. dollar on Monday amind the greenback’s strengthening and ahead of the expected renewal of the Bank of Canada’s monetary policy framework. The currency has weakened each day since last Wednesday. Oil, one of Canada’s major exports, was under pressure amid new concerns about the Omicron coronavirus variant and doubts about the effectiveness of vaccines. The loonie was trading 0.4% lower at 1.2775 to the greenback. Further dynamics of the Canadian dollar will depend on the oil market and the rhetoric of the American regulator on Wednesday. If the Fed accelerates the stimulus cut, the rise in the U.S. dollar will put pressure on the Canadian currency. Immediate resistance can be seen at 1.2830. A breakout to the upside can trigger growth towards 1.29.

BUY STOP 1.2830/TP 1.29/SL 1.2810


GBP/USD: Sterling traded lower on Monday as Britain braced for a “tidal wave” of the Omicron coronavirus variant and investors took the view the Bank of England would keep interest rates on hold to assess its economic impact before tightening monetary policy. British Prime Minister Boris Johnson warned of an incoming surge in infections and said at least one patient had died in the United Kingdom after contracting the Omicron variant. The pound fell 0.3% to 1.3230. Further deterioration of the situation with the coronavirus may cause the British currency to decline to 1.30. Immediate support is located at 1.3180. A breakout below could take the pair towards 1.31.

SELL STOP 1.3180/TP 1.31/SL 1.3210


EUR/USD: The euro dipped at the start of a week in which the European Central Bank, the U.S. Federal Reserve and the Bank of England are all due to meet and possibly signal a tightening of policy in the face of strong inflation. But growing Omicron infections in Europe and the United States complicate matters and are likely to trigger some caution as policymakers on either side of the Atlantic prepare to signal or hint at an end to pandemic-era measures. Weak statistics, a strong dollar and an increase in the number of coronavirus cases will continue to put pressure on the euro. Immediate support is seen at 1.1270. A breakout below could take the pair towards 1.12.

SELL STOP 1.1270/TP 1.12/SL 1.13