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USDCAD Correction after Active Growth Yesterday

11/29/2022 11:14 AM

During the Asian session, the USD/CAD pair is moderately declining, correcting after active growth yesterday, when it touched 1.3500 and renewed local highs of November 10.

Market participants are making conflicting decisions, reacting to comments from representatives of the European Central Bank (ECB) and the US Federal Reserve, and waiting for new drivers, as this week's macroeconomic calendar includes key publications. So, in the US, final data on Q3 gross domestic product (GDP) and a November labor market report will be released. On Wednesday, statistics on business activity in China for November will be published, to which investors will pay special attention, as now mass protests are taking place in the country against new quarantine restrictions. On Tuesday, analysts will focus on renewed statistics from Canada on Q3 gross domestic product (GDP): forecasts suggest a slowdown in national economic growth from 0.8% to 0.4% QoQ, but it may grow from 3.3% to 3.5% YoY.

The American currency was supported on Monday by the comments of the US Federal Reserve James Bullard, who advocated a longer period of high interest rates than previously estimated. According to the official, the regulator will keep the indicator close to the highs ​​​​(about 5.0%) next year. However, a similar scenario should not be ruled out at the beginning of 2024.

On the daily chart, Bollinger bands reverse into a horizontal plane: the price range expands from above not as fast as the "bullish" activity develops. MACD grows, keeping a strong buy signal (the histogram is above the signal line). Stochastic shows similar dynamics. However, it is actively approaching its highs, indicating that the US dollar may become overbought in the ultra-short term.

Resistance levels: 1.3500, 1.3550, 1.3600, 1.3650. | Support levels: 1.3440, 1.3356, 1.3300, 1.3226.

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