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Inflation Data Put Pressure on the USDCAD Positions

12/14/2022 10:50 PM

The US dollar shows moderate growth, correcting after a noticeable decline the day before, which was provoked by the publication of macroeconomic statistics on inflation in the US in November. The Consumer Price Index slowed in annual terms from 7.7% to 7.1%, which turned out to be better than analysts' expectations of a decline to 7.3%, and in monthly terms, an increase of only 0.1% was recorded after an increase of 0.4% in October, while forecasts suggested 0.3%. The Core CPI fell from 6.3% to 6.0%, also beating analysts' forecasts at 6.1%. The released data strengthened the confidence of market participants that the US Federal Reserve will decide to raise the interest rate by only 50 basis points.

Meetings of the National Bank of Switzerland, the European Central Bank (ECB) and the Bank of England will take place tomorrow. Markets are also expecting a 50 basis point hike in interest rates from all regulators, but European and British ones are likely to again point to recession risks in their economies.

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic shows a more confident downward trend but is already approaching its lows, which indicates the risks of oversold US dollar in the ultra-short term.

Resistance levels: 1.3600, 1.3650, 1.3700, 1.3750. | Support levels: 1.3550, 1.3500, 1.3450, 1.3400.

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