USD/CAD closet to 1.2900 ahead of FOMC meeting

• The pair trims initial losses and is now trading in highs around 1.2880.
• DXY leaps to the area of daily highs near 92.50.
• US FOMC meeting next of relevance later in the NA session.

The greenback has reverted the initial drop vs. its Canadian peer and is now pushing USD/CAD to new session highs in the vicinity of 1.2900 the figure.

USD/CAD looks to FOMC

A bout of buying pressure around the greenback is helping the pair to clinch its third consecutive day with gains on Wednesday, looking at the same time to retake the 1.2900 milestone and above.

In the meantime, the US Dollar stays supported by strong sentiment and higher US yields, with the key 10-year benchmark rebounding to the boundaries of the 3.0% level earlier in the day.

In addition, the ADP report showed the US private sector added more jobs than initially estimated in April (204K), also underpinning the rebound in the buck.

Later in the NA session, the FOMC is expected to keep the monetary status quo unchanged, while expectations of a rate hike at the June meeting keep gathering traction.

USD/CAD significant levels

As of writing the index is gaining 0.20% at 1.2876 and a breakout of 1.2899 (high Apr.25) would aim for 1.2927 (38.2% Fibo of the 2017 drop) and finally 1.2946 (high Apr.2). On the downside, the next support is located at 1.2804 (low May 2) followed by 1.2722 (38.2% Fibo of the 2017 drop) and then 1.2633 (200-day sma).