USDCAD PRICE HITS RESISTANCE AHEAD OF THE BOC DECISION

The Dow Jones, Russell 2000, and Nasdaq 100 indices rose slightly as investors bought the recent dip ahead of the bank earning season. On Tuesday, PepsiCo, one of the biggest beverage companies, reported better-than-expected quarterly results. It made over $20.2 billion in the second quarter, better than the expected $19.51 billion. On Wednesday, the key companies that will publish their results are Progressive, Fastenal, and Delta Air Lines. They will be followed by Taiwan Semiconductor, JP Morgan, Morgan Stanley, and Conagra Foods who will publish on Thursday. Analysts expect that the companies will publish weak earnings due to the rising inflation.

The US dollar cooled down slightly after soaring to a multi-decade high as investors waited for the upcoming American inflation data. Economists expect the data to show that the headline inflation data to show that inflation remained at elevated levels in June. They see inflation rising from 8.6% in May to 8.8% in July. On the other hand, they expect that the core inflation declined from 6.0% to 5.7% in June. Still, these numbers will likely have no impact on what the Federal Reserve will do later this month. The bank has already hinted that it will hike interest rates by 0.75% in a bid to fight inflation.

There will be some important economic events on Wednesday. Earlier on, the Reserve Bank of New Zealand (RBNZ) decided to hike interest rates from 2.0% to 2.50% in its bid to fight the soaring inflation. The South Korean central bank also decided to hike by 50 basis points. The next key central bank to watch will be the Bank of Canada, which is expected to continue with its rate hikes policies. The other important economic data to watch will be the latest GDP data by the UK’s Office of National Statistics. These numbers are expected to show that the country contracted in June.

EURUSD

The EURUSD sell-off took a breather after it crashed to parity on Tuesday. It is trading at 1.0062 as some sellers take profits. On the four-hour-chart, the pair is below the 25-day moving average while the Average Directional Index (ADX) has risen to the highest point in more than a year. The Relative Strength Index (RSI) has moved slightly above the oversold level. Therefore, the pair will likely resume the bearish trend as sellers attempt to move below 1.00.

XBRUSD

The XBRUSD pair declined sharply as investors waited for the upcoming meeting between Joe Biden and Salman of Saudi Arabia. The pair dropped to a low of 97.88, which is slightly above the lowest level this month. It has moved below the 25-day and 50-day moving averages while the MACD has moved below the neutral point. The pair is also below the important resistance level at 105. Therefore, it seems like oil has gained more downward momentum, meaning that it could drop to about 95.

USDCAD

The USDCAD pair declined slightly ahead of the upcoming interest rate decision by the Bank of Canada. It dropped to a low of 1.300, which was the lowest level since Monday. This price is slightly below the important resistance level at 1.3062. The price has moved to the 25-day moving average while the Stochastic Oscillator has tilted downwards. The pair will likely keep falling as sellers target the key support at 1.2900.