Equities are marching higher, carrying on the post-Fed momentum yesterday, helped by the soothing of Evergrande fears on the week.
That is keeping risk trades a little more buoyed on the session, with AUD/USD pushing up to 0.7260 and USD/CAD falling by 0.5% to 1.2705:
The 200-hour moving average (blue line) held the drop in USD/CAD yesterday amid a whipsaw in the dollar post-Fed but the level looks to be giving way now. A firm break below that will put sellers in near-term control as we navigate through the week.
There is some support nearby from the 50.0 retracement level @ 1.2695 but amid the more positive risk momentum, sellers may have a strong incentive to try and look towards 1.2600 next. However, I'd argue that the dollar isn't likely to wilt completely but the lack of meaningful response in Treasury yields (even with a more hawkish Fed) is as good a reason as any to keep pressure on the greenback.