|

USD/CAD pierces 1.33 in broad-market Greenback selloff

  • USD/CAD sets another 19-week low as the Loonie climbs into 1.3300 against the Greenback.
  • Broader markets are pushing down the USD as risk appetite recovers from Wednesday's late-day plunge.
  • US PCE inflation undercuts market forecasts, markets race to peg 2024 rate cut bets even higher.

The USD/CAD eased into 1.3300 as the Canadian Dollar (CAD) gets one last crack at the handle as markets gear up for the holiday shutdown with a broad-base selloff of the US Dollar (USD).

US inflation figures came in below expectations as price growth decelerated quicker than most expected, giving markets the excuse they needed to ramp up bets of even further rate cuts from the Federal Reserve (Fed) next year, and the gap between the Fed and money markets continues to widen.

The Fed’s own dot plot of interest rate expectations sees around 75 basis points in rate cuts through 2024, and Thursday’s US data prints see markets pushing their 2024 median rate cut expectations to an eye-watering 160 basis points by the end of next December.

CAD Retail Sales barely register on the needle as markets chew on US PCE preview

Canadian Retail Sales mixed on Thursday, with October’s Retail Sales slipping back from 0.8% to 0.78% versus September’s 0.5% (revised down from 0.6%). However, Retail Sales excluding motor vehicles and vehicle parts from the same period beat expectations, ticking up from 0.5% to 0.6% versus the previous 0.1% (also revised down from 0.2%).

US Initial Jobless Claims ticked up slightly for the week into December 15, but much less than markets were expecting, printing at 205K versus the previous week’s 203K (revised up from 202K).

The market’s key focal point on Thursday was US Core Personal Consumption Expenditures for the third quarter, which slipped to 2.0% versus the forecast steady print of 2.3%, bringing inflation measures down to a key target level for the Fed.

US Annualized third quarter Gross Domestic Product (GDP) also softened on Thursday to round out the US data dump, coming in at 4.9% versus the forecast steady reading of 5.2%.

USD/CAD Technical Outlook

With the USD/CAD setting a fresh 19-week low into the 1.33 handle, further declines could easily be on the cards for the pair as the Canadian Dollar bids into chart territory with limited technical barriers against the US Dollar.

The USD/CAD is set for another week of declines, having closed in the red for five of the last seven consecutive trading weeks.

Intraday price action has run well ahead of the median bids, with the 200-day Simple Moving Average (SMA) falling behind at 1.3440 as price accelerates declines.

Daily candlesticks reveal much of the same as price drops away from the 200-day SMA at the 1.3500 handle, and the USD/CAD is down around four and one-third of a percent from November’s peak bids just shy of the 1.3900 handle.

USD/CAD Hourly Chart

USD/CAD Daily Chart

USD/CAD Technical Levels

USD/CAD

Overview
Today last price1.3302
Today Daily Change-0.0067
Today Daily Change %-0.50
Today daily open1.3369
 
Trends
Daily SMA201.3532
Daily SMA501.3658
Daily SMA1001.36
Daily SMA2001.3505
 
Levels
Previous Daily High1.337
Previous Daily Low1.3312
Previous Weekly High1.3619
Previous Weekly Low1.335
Previous Monthly High1.3899
Previous Monthly Low1.3541
Daily Fibonacci 38.2%1.3348
Daily Fibonacci 61.8%1.3334
Daily Pivot Point S11.333
Daily Pivot Point S21.3292
Daily Pivot Point S31.3272
Daily Pivot Point R11.3389
Daily Pivot Point R21.3409
Daily Pivot Point R31.3447

Author

Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

More from Joshua Gibson
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.