USD/CAD hits fresh daily highs above 1.3350 on a quiet session ahead of key data
|- US Dollar up modestly amid higher US yields ahead of Fed and key data.
- Equity and crude oil prices trim losses during the American session.
- USD/CAD holds above 1.3300, risks remain tilted to the downside.
The USD/CAD peaked during Monday’s American session at 1.3357, the highest level since Thursday. It is hovering around 1.3350, slightly away from the critical support area of 1.3300.
The January low around 1.3300 is the key level to the downside: a break lower could open the doors to an extension toward to 1.3220 (November low) and the 200-day Simple Moving Average (SMA) today at 1.3204. On the upside, a consolidation above 1.3360 would set the attention on 1.3400 and the 20-day SMA at 1.3420.
The US Dollar is rising on Monday amid higher US yields and risk aversion. The 10-year Treasury yield stands at 3.54% and the 2-year at 4.26%, the highest since January 12. The Dow Jones is falling by 0.39% and the Nasdaq slides by 1.48%.
Price action remain limited on Monday ahead of busy days. On Tuesday, Canada will report November GDP data, expected at 0%. Analysts at TD Securities look for a flat print on industry-level GDP with a muted performance across both goods and services “with new flash estimates expected to show a modest expansion in December.” They point out the “ultra sensitivity to data releases is on hold” with the Bank of Canada moving towards a pause. “We expect cuts to start in January and expect the data to deteriorate in the coming months.”
In the US will be a busy week, with the FOMC meeting on Wednesday and the Non-farm payrolls report on Friday. The Federal Reserve is expected to raise interest rates by 25 basis points. Fed’s outlook will be critical and could trigger volatility across the FX board.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.