USD/CAD drops below 1.3700 as risk-off tone eases, US/Canada jobs eyed


  • USD/CAD has slipped below 1.3700 as the risk-off mood has eased marginally.
  • Fed’s hawkish guidance brought a sheer decline in risk-perceived currencies.
  • Oil prices have reclaimed $89.00 on a decline in oil stockpiles reported by the EIA.

The USD/CAD pair has sensed selling pressure after registering a fresh weekly high at 1.3724 in the Tokyo session. The responsiveness of a decline in the asset is marginal compared with the late New York rally. Therefore, it would be early to announce that the risk aversion theme has faded. S&P500 futures have displayed a rebound, while the US dollar index (DXY) has dropped below the critical support of 112.00.

The 10-year US Treasury yields are stabilized around 4.12% as a more significant rate hike by the Federal Reserve (Fed) was followed by hawkish guidance. Despite pushing the interest rates to the highest at 3.75-4% since 2008, ceasing of more policy tightening seems far as Fed chair Jerome Powell has announced that pausing tightening measures is very premature at this stage.

Long-term inflation expectations are well anchored, but short-term inflation expectations have not displayed a meaningful slowdown yet. Therefore, the Fed will continue its momentum toward achieving discussed terminal rate of 4.75%.

Risk-perceived currencies are taking a sigh of relief as wild gyrations are generally followed by a contraction in volatility. Going forward, the housing sector could face significant troubles as interest obligations are skyrocketing, and households could postpone their demand for new homes. Apart from that, investors will also keep an eye on delinquency costs.

On Friday, US/Canada employment data will remain in focus. The US Nonfarm Payrolls (NFP) is seen lower at 200k vs. the prior release of 263k. While the unemployment rate will increase to 3.6%.

Meanwhile, Canada’s Net Change in Employment is seen lower at 10k against the former figure of 21.1k. While the jobless rate is expected to decline to 5.2%.

Oil prices have resurfaced to $89.00 after a corrective move as a decline in oil stockpiles by the Energy Information Administration (EIA) has strengthened oil bulls. The EIA reported a decline in oil inventories by 3.115M barrels for the week ending October 28.

USD/CAD

Overview
Today last price 1.3692
Today Daily Change -0.0019
Today Daily Change % -0.14
Today daily open 1.3711
 
Trends
Daily SMA20 1.3707
Daily SMA50 1.3469
Daily SMA100 1.3193
Daily SMA200 1.2953
 
Levels
Previous Daily High 1.3714
Previous Daily Low 1.3549
Previous Weekly High 1.3774
Previous Weekly Low 1.3496
Previous Monthly High 1.3978
Previous Monthly Low 1.3496
Daily Fibonacci 38.2% 1.3651
Daily Fibonacci 61.8% 1.3612
Daily Pivot Point S1 1.3602
Daily Pivot Point S2 1.3493
Daily Pivot Point S3 1.3437
Daily Pivot Point R1 1.3767
Daily Pivot Point R2 1.3823
Daily Pivot Point R3 1.3933

 

 

 

 

 

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