- USD/CAD prints two-day downtrend, refreshes intraday low at the latest.
- Risk-on mood, softer USD underpin WTI crude oil’s run-up to refresh weekly top.
- Canada trade numbers, PMIs join second-tier US data to decorate calendar.
- Risk catalysts are more important ahead of Friday’s US CPI.
USD/CAD takes offers to refresh day’s low around 1.2730, down 0.25% intraday heading into Tuesday’s European session. The Loonie pair reversed from late September highs the previous day but a lack of major catalysts and risk-on mood dragged the quote afterward.
Market sentiment improves amid an absence of notable virus-led deaths and expectations of finding a cure to the COVID-19 strain from South Africa, dubbed as Omicron. Adding to the risk-on mood is the People’s Bank of China’s (PBOC) Reserve Ratio Requirement (RRR) actions and Japan’s readiness for record stimulus.
It’s worth noting that mixed trade numbers from China, global rating agency Moody’s stable outlook for Chinese financial institutions and cautious optimism conveyed by the Reserve Bank of Australia (RBA) added to the firmer sentiment.
To portray the mood, the US Treasury yields and the stock futures keep the week-start rebound but the US Dollar Index (DXY) eases of late, down 0.05% intraday around 96.20.
More importantly, firmer risk appetite and softer DXY favored Canada’s main export item WTI crude oil to rise to a one-week high, up 1.0% on a day around $70.40 by the press time. The same exerts additional downside pressure on the USD/CAD prices.
Looking forward, US trade numbers, Nonfarm Productivity and Unit Labour Cost will join the Canadian International Merchandise Trade and Ivey Purchasing Managers Index for November to direct short-term USD/CAD moves. Also important will be weekly private inventory data for oil. It should be observed, however, that qualitative catalysts will be more important for fresh impulse ahead of Friday’s US Consumer Price Index (CPI).
Technical analysis
Sustained break of a short-term rising channel formation joins bearish MACD signals to direct USD/CAD sellers towards the 100-SMA level surrounding 1.2690. Alternatively, corrective pullback not only needs to restore the channel formation, by rising back beyond 1.2790 but should also overcome the weekly descending resistance line, close to 1.2850, for conviction.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD dips below 0.6600 following RBA’s decision
The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.
EUR/USD edges lower to near 1.0750 after hawkish remarks from a Fed official
EUR/USD extends its losses for the second successive session, trading around 1.0750 during the Asian session on Wednesday. The US Dollar gains ground due to the expectations of the Federal Reserve’s prolonging higher interest rates.
Gold wanes as US Dollar soars, unfazed by lower US yields
Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.
Solana FireDancer validator launches documentation website, SOL price holds 23% weekly gains
Solana network has been sensational since the fourth quarter (Q4) of 2023, making headlines with a series of successful meme coin launches that outperformed their peers.
Living vicariously through rate cut expectations
U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year.