- US dollar jumps across the board following Fed Chair Powell comments.
- USD/CAD rose to test the 1.2380 resistance area.
The USD/CAD climbed from 1.2350 to 1.2383, matching Thursday’s high. The pair remains near the high, with a strong bullish impulse. A break higher would clear the way for a test of 1.2400.
A stronger US dollar across the board has been the critical driver in USD/CAD. Fed Chair Powell mentioned that high inflation will likely last well into next year. He affirmed that it is the time to taper QE but not to raise rates. US stocks turned negative after Powell’s comments and commodities reversed sharply.
The USD/CAD faces a key barrier around 1.2400/10. If it breaks higher it could clear the way to more gains. Analysts at ING see the rally in CAD looking quite tired. “We expect to see more support in USD/CAD around the 1.2300 level. Most of the positives (BoC tightening, solid economic recovery, higher energy prices) appear in the price and our short-term fair value model currently shows a 1.5% undervaluation in USD/CAD.”
A key event next week will be the Bank of Canada meeting. At ING, they do expect the central bank to deliver another round of tapering “but that is a move that is likely fully priced in.” They see the balance of risks clearly tilted to the upside for USD/CAD next week. “August GDP data released two days after the BoC meeting may provide only a small help to CAD.”
|Today last price||1.2379|
|Today Daily Change||0.0009|
|Today Daily Change %||0.07|
|Today daily open||1.237|
|Previous Daily High||1.2384|
|Previous Daily Low||1.2288|
|Previous Weekly High||1.2498|
|Previous Weekly Low||1.2337|
|Previous Monthly High||1.2896|
|Previous Monthly Low||1.2494|
|Daily Fibonacci 38.2%||1.2347|
|Daily Fibonacci 61.8%||1.2325|
|Daily Pivot Point S1||1.2311|
|Daily Pivot Point S2||1.2252|
|Daily Pivot Point S3||1.2215|
|Daily Pivot Point R1||1.2406|
|Daily Pivot Point R2||1.2443|
|Daily Pivot Point R3||1.2501|
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.