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USD/CAD Signal - FOMC Meeting - 14 Dec 2016

Signal details
Entry Price: 
1.3110
Close Price: 
1.3273
Direction: 
High
Expiry Time: 
21:00 GMT
Result: 
ITM
How we trade
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The Federal Reserve's two-day FOMC meeting concludes today and investors are certain that the central bank will be hiking interest rates for a second time after the first rate increase in last December. Given the current pace of the U.S. economic recovery, the expectations are strongly bullish.

Investors will be focusing on the forward guidance and the Fed's expectations on the short term interest rates for next year. Currently, it is widely expected that the Fed will be able to hike at least twice next year, which could see additional gains in the U.S. dollar.

The Canadian dollar has remained stronger against the U.S. dollar largely in part due to higher oil prices. However, yesterday, USDCAD closed out with a doji candlestick pattern after testing the support at 1.3106 -1.3100. We therefore expect USDCAD to push higher from here on. Purchase daily call options at 1.3110 for an end of day expiry at 21:00 GMT.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.