USD/CAD retreats from daily tops around 1.2700 after FOMC minutes

The USD/CAD slides from daily tops around 1.2700, down some 0.09%, trading at 1.2661 during the New York session at the time of writing. A risk-off market sentiment spurred demand for the greenback, as it keeps posting new year-to-date highs versus most G8 currencies, except for the Canadian dollar, as the FOMC’s last meeting minutes were unveiled.

On Wednesday, the Federal Reserve unveiled the last FOMC meeting minutes, which showed that some participants would like to adjust the QE’s taper pace and raise rates sooner than anticipated if inflation runs hot.

According to Reuters, “some participants suggested that reducing the pace of net asset purchases by more than $15B each month could be warranted.” Further added and It is worth noting that “some participants preferred a somewhat faster pace of reductions that would result in an earlier conclusion to net purchases.”

In the meantime, the US Dollar Index measures the greenback’s performance against a basket of six rivals, is up 0.41%, sitting at 96.80 at press time, but earlier reached a new 16-month high at 96.93.

Earlier in the New York session, the Initial Jobless Claims for the week ending on November 20 increased to 199K, better than the 260K estimated by analysts, the lowest since 1969. Further, the US GDP for Q3 grew by 2.1%. In line with market participants’ expectations.

Moving to the Federal Reserve’s favorite gauge for inflation, the Personal Consumption Expenditure (PCE) Price Index increased by 4.1% YoY in October, in line with the median economist forecasts and confirmed a 0.4% rise from last month’s upwardly revised reading of 3.7%.

USD/CAD Price Forecast: Technical outlook

The USD/CAD pair retreated from 1.2700s daily tops, at press time is trading below the November 23 low at 1.2660. In the case of accomplishing a daily close beneath the abovementioned, it could form a gravestone-doji, which indicates intense selling pressure above the open/close of Wednesday’s price action, opening the door for a further downward move.

In that outcome, the first support level would be the psychological 1.2600. A break of the latter would expose the 100-day moving average (DMA) at 1.2557, immediately followed by the 50-DMA at 1.2529, and then the 1.2500 figure.