Rate decisions and dollar cascades - North American Mid-Week Market update

Ben Graham · 1 hora atrás

Mid-Week review where we dive into the major developments for North American and global traders
Huge session coming up for traders as Bank of Canada just published their rate decision and traders await for the FOMC/Earnings combo
The US Dollar is falling to 4 year lows as Trump comments on the currency

Log in to our mid-week North American Markets overview, where we examine the current themes in North America and provide an overview of indices and currency performances.

Trends and themes change fast in the current wild Market environment.

After last week's look at the end of the world as we know it, as the US Administration threatened to buy Greenland, participants are now switching back to a few immediate risks.

What happens to the Fed, particularly the dollar, after this afternoon? The 14:00 FOMC Rate Decision could potentially be combined with the announcement of the next Fed Chair.
- With this afternoon's decision, 97% priced for a hold, Trump may want to turn the attention to what's coming up next by announcing his decision– Powell's term as chair is ending in May.
Will anything happen with Iran, and how big an impact will it have on Markets?
- Gold is making daily records above $5,000; WTI Oil is trading to new 2026 highs above $63.
- A few banks have issued their warnings regarding a complacent Investor behavior despite geopolitical risks – But we're in the dip-buying age in investing so let's see how this plays out.

The US dollar has been attracting quite a bit of attention in the past few weeks after tumbling at a record pace.

With the latest EU-US drama, participants are harshly rejecting the Greenback, a trend that is worsening as pre-FOMC low liquidity tends to exaggerate Market moves.

Even after the monday gap down, the US President said "The value of the dollar [..] is doing great", neglecting the 3% move lower that had happened throughout the past week and creating yet another flash USD sale to 4-year lows.

The effect may reverse over the afternoon as Traders brace for Powell's Speech at the FOMC press conference.

On the North side of the border, the Bank of Canada just held rates steady at 2.25%, with nothing too new from the Central Bank – the economy is flattening, but nothing alarming.

Governor Macklem mentioned that Canada performed better than preliminary 2025 numbers indicated – the CAD is strengthening but remains just below the USD in daily performance. About 9 bps of a hike are priced through 2026; nothing to see here.

With nothing new in the Rate Decision statement, traders will focus on the upcoming Press Conference. It will be interesting to hear what the Governor has to say about recent geopolitical madness and how it affects Canada's outlook.

You can access the meeting here.

Let's dive right into our Mid-Week North American Markets recap.

North-American Indices Performance

fx ind 2801 — North American Top Indices performance since last Monday – January 28, 2026 – Source: TradingView

You can see how global Stocks indexes have profited from the drop in the US Dollar, particularly higher beta assets and stocks, taking the Nasdaq to the top – 4% in a volatile week is an impressive feat.

The S&P 500 also marked fresh all-time highs just yesterday, pointing to some confusion factors – What holds stocks so high ahead of the Fed? Will such levels hold after the event?

Dollar Index 4H Chart

dxy 2801 — Dollar Index 4H Chart, January 28, 2026 – Source: TradingView

The US Dollar took a 4% hit since January 16, with the move reaching extremes in yesterday's session.

As was argued in our in-depth DXY analysis, pre-FOMC action could be faded as Participants come back to the Markets.

Today's even will be quintessential, and of course, keep track of the Fed Chair nominee announcement.

Levels of interest for the Dollar Index:

Resistance Levels

2025 Lows 96.40 to 96.80 Support now Pivot
97.00 Pivotal Resistance
98.00 Key Resistance (+/- 100 pips)
Pre-Greenland Resistance 99.25 to 99.50

Support Levels

95.50 to 95.70 Flash-crash Support
95.565 Tuesday lows
94.70 to 95.00 Psychological level
93.00 Next Main Support

US Dollar Mid-Week Performance vs Majors

usdperf 2801 — USD vs other Majors since last Monday, January 28, 2026 - Source: TradingView

The one-way move in the Dollar Index translates well to the movement in individual Major FX pairs.

The drop in the US Dollar spans between -2% against the Euro to -4% against the Australian Dollar.

Canadian Dollar Mid-Week Performance vs Majors

CAD perf 2801 — CAD vs other Majors, January 28, 2026 - Source: TradingView.

The Loonie had been brought down by the performance of its neighbor but as the Bank of Canada day passes, it's regaining quite some strength.

See how the CAD is recovering against its major peers in today's session – Expect more strengthening particularly if Oil prices explode from Middle East conflicts.

Bank of Canada Governor Macklem is speaking live.

Intraday Technical Levels for the USD/CAD

USDCAD 2801 — USD/CAD 4H Chart, January 28, 2026 – Source: TradingView

The North American FX Pair just reached levels unseen since October 2024, period that was marked by sudden USD strength and CAD weakness.

Now, the picture looks uncertain – the Canadian Dollar seems poised for some upside in 2026 which could lead to further downside in the pair but the USD is also looking at the stage of bouncing back.

Hence, traders looking to profit from potential CAD strength could look at other Loonie pairs like CAD/CHF or CAD/GBP.

Levels of interest for USD/CAD:

Resistance Levels

1.3650 to 1.3770 December Pivot and 20-period 4H MA
1.3750 Pivotal Resistance
1.37070 Descending Channel Highs
1.38 Handle Resistance +/- 150 pips

Support Levels

1.3535 Session and 2-year lows
1.3550 Main 2025 Support (immediate test)
1.35 Key Psychological Support – Pre-2025 CAD weakening level

US and Canada Economic Calendar for the Rest of the Week

na calendar 2801 — US and Canadian Data for the rest of the week, MarketPulse Economic Calendar

Stay in touch with the latest geopolitical developments, as the tone could remain spicy.

Keep a close eyes on the FOMC Rate Decision and particularly Powell's Press Conference, how it moves the US Dollar.

Some extra factors also maintain uncertainty regarding the next Fed Chair– And don't forget about Iran.

Safe Trades!

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