USD/CAD price posted a modest recovery after market participants bought the dips on Friday morning in Asia. To begin with, the price rebounded from the 1.2920 level and is testing the next immediate resistance zone, the 1.29500 mark. Further strength may result in the retest of the 1.29716 swing low formed on August 22. From a fundamental perspective, the current monetary policy divergence is expected to favor the U.S. dollar in the near term. Analyzing the daily chart, USD/CAD may struggle initially to recover above the 1.3000 level but if the price closes above this level due to FOMC chatters, then the next target would be the 1.30500 mark.
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