Market moods improved yesterday after Russia announced that it is withdrawing some troops from the Russia-Ukraine border. Evidence of an actual withdrawal is yet to emerge but markets are welcoming this alleged de-escalation. While potential conflict in the Eastern Europe will remain high on the agenda, investors were allowed to catch some breath and may focus on more regular market events, like data releases.
Release of the FOMC minutes at 7:00 pm GMT is a key event of the day. However, investors will also be offered US retail sales data for January and Canadian CPI report for January - both at 1:30 pm GMT. When it comes to FOMC minutes, traders will look for hints on scope of incoming tightening. Recent CPI reading from the US boosted odds for a bigger move during the March meeting. The US retail sales report is expected to show a month-over-month increase following a drop in December. Meanwhile, the Canadian inflation report is expected to show consumer price growth remaining unchanged at 4.8% YoY in January.
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Open account Try demo Download mobile app Download mobile appAs both data from United States and Canada will be released at 1:30 pm GMT, USDCAD is expected to get more volatile. Taking a look at the chart of the pair at H4 interval we can see that USDCAD has been trading in a range as of late. Recent upward impulse failed to reach the upper limit of the range at 1.2790 and the pair started to pull back. Should declines deepen, the first support zone to watch can be found at the lower limit of the range in 1.2660 area. A breakout from the range may determine the direction of a next big move.
Source: xStation5
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