USD/CAD is trending higher on its 1-hour time frame after it found support around the 1.0500 area. 

The Loonie is currently being supported by the rise in oil prices, which was spurred by the conflict in Egypt, but this could change once the FOMC meeting minutes are released.

In their latest statement, the Fed talked about their plan to reduce bond purchases by the end of the year and possibly end their stimulus program in the middle of 2014. This sparked a huge dollar rally, especially since this was followed by strong U.S. economic figures.

The minutes should shed light on how strongly the policymakers feel about reducing bond purchases. Strong support from most Fed officials could boost the dollar during the release at 7:00 pm GMT.

USD/CAD could bounce from the bottom of the channel at 1.0500 and climb back to the top and even break higher. Stochastic is already in the oversold region, suggesting a potential bounce could take place soon.

By Kate Curtis from Trader’s Way