Solid News

The USDCAD Pair Recovers to Weekly Highs

12/6/2022 11:33 AM

The US dollar shows mixed trading dynamics, consolidating near 1.3600 and local highs from November 29. The day before, the USD/CAD pair showed active growth in response to the publication of optimistic macroeconomic statistics from the US. In particular, traders drew attention to a sharp increase in the Services PMI from the Institute of Supply Management (ISM) in November from 54.4 points to 56.5 points, with a forecast of a decline to 53.1 points.

In turn, significant pressure on the position of the US dollar was exerted by news from China, where, after prolonged protests, the authorities are going to somewhat soften the quarantine measures introduced in connection with the increased incidence of COVID-19. In particular, restrictions were eased in Shanghai and Hangzhou over the weekend. It is expected that in the near future China may announce that citizens can now self-isolate at home if the disease is mild.

At the end of last week in Canada, a report on the labor market for November was published, according to which the number of employed citizens increased by 10.1 thousand after an increase of 108.3 thousand in the previous month, while analysts expected a more modest growth of 5.0 thousand. At the same time, the Unemployment Rate in November corrected from 5.2% to 5.1%, while the market expected 5.3%, and the Average Hourly Wage slowed down from 5.5% to 5.4%.

Investors are gearing up for the Bank of Canada monetary policy meeting on December 7. It is expected that the interest rate will be adjusted by 0.25% or 0.50%, which will eventually be the most significant increase since 2008. Experts believe that an increase in "hawkish" rhetoric will bring the indicator to 4.25%, and the base value to 6.45%. Earlier, representatives of the Canadian regulator acknowledged that inflationary pressures in the country are increasing, and consumer prices are rising faster than projected, which requires decisive steps to tighten monetary policy; however, experts are confident that officials are at the stage of curtailing the cycle of interest rate hikes, and each subsequent decision will increasingly depend on economic indicators.

Bollinger Bands in D1 chart show moderate growth. The price range is expanding from above but it fails to conform to the development of "bullish" sentiments at the moment. MACD grows, preserving a stable buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic is also showing moderate growth, but is rapidly approaching its highs, indicating the risks of overbought US dollar in the ultra-short term.

Resistance levels: 1.3600, 1.3650, 1.3700, 1.3807. | Support levels: 1.3550, 1.3500, 1.3450, 1.3400.

Find Us
Registered Address : Bonovo Road – Fomboni Island of Mohéli – Comoros Union
Sofia, PO Box 1407,14 Flip Kutev Str. Floor 2, Industrial area Hladilnika, Bulgaria
Call Us
+35 924 928 392

Disclaimer 1: Solid ECN Securities LLC and it affiliates does not accept clients from Turkey, United States, and Europe.
Disclaimer 2: The information provided on this site is not intended for residents of any country or jurisdiction where its distribution or use would violate local laws or regulations.
Risk Warnings
Solid ECN Securities LLC offers trading on Foreign Exchange (‘Forex’ or ‘FX’) and Contracts for Difference (‘CFDs’), which are complex financial products that are traded on margin. They carry a high level of risk since leverage can work both to your advantage and disadvantage. As a result, these products may not be suitable for all investors, as loss of all invested capital may occur. You should not risk more than you are prepared to lose. Before deciding to trade, you need to ensure that you understand the risks involved and consider your investment objectives and level of experience. Seek independent advice, if necessary.
Solid ECN Securities LLC does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. Solid ECN Securities LLC is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.
This website is not directed at any jurisdiction and is not intended for any use that would be contrary to local law or regulation.
By using you agree to use our cookies to enhance your experience.
Solid ECN Securities LLC is authorized and regulated by the Comoros Union with reference number HY00623411.
Copyright All Right Reserved 2023