- The USD/CAD weekly forecast stays bearish amid prevailing greenback weak spot.
- The CAD gained as oil costs ticked up whereas Canada’s employment information remained upbeat.
- Markets await FOMC and BoC charge choices due subsequent week, whereas focus stays on the Fed Chair’s commentary.
The USD/CAD slumped final week because the Canadian greenback gained renewed energy amid rising oil costs and a surprisingly upbeat November jobs report. In the meantime, the US greenback got here below strain from intensifying expectations of a Fed charge reduce.
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What occurred final week
On Friday, the official Canada employment information confirmed 53,600 new jobs in November, whereas the unemployment charge dropped to six.5%, nicely under expectations. The robust figures renewed confidence that the Financial institution of Canada is in pause mode a minimum of if not utterly performed with the easing.
On the identical time, oil costs, being a key driver of CAD, ticked increased as world power markets remained agency, including additional assist to the loonie. The USD/CAD costs reached under 1.3900, the weakest degree in round two months.
From the US, the rising conviction that the Fed will reduce charges subsequent week has weakened the greenback. Following the current blended indicators on inflation and labor, markets now value in a 90% chance of a 25-basis-point charge reduce. This continues to weigh on the dollar broadly.
What might occur subsequent week?
The three main eventualities persist for the subsequent week:
- If oil costs keep agency and Canada’s financial momentum holds, the USD/CAD might face additional draw back strain, particularly if US information stays unfavorable.
- If the US jobs information comes upbeat whereas the Fed maintains a hawkish tone, the pair might face upward strain in direction of 1.4000 and above.
- If the US information stays blended whereas the BoC leaves a impartial tone, the worth might keep in a well-recognized vary close to 1.3900.
Main USD/CAD Occasions to Watch Subsequent Week
The important thing occasions forward embody:
- Financial institution of Canada In a single day Charge
- Financial institution of Canada Press Assertion
- US JOLTs Job Openings
- US Weekly ADP Employment
- FOMC Charge Determination
- Fed Chair Press Convention
- US Employment Price Index
- US Jobless Claims
The Fed Chair’s assertion stays pivotal, because the markets have already priced within the charge reduce determination.
USD/CAD Weekly Technical Forecast: Bearish Under 200-DMA
The USD/CAD each day chart exhibits Friday’s candle piercing under the 100-day and 200-day MAs close to 1.3900, whereas the 20-day and 50-day MAs are going to type a bearish crossover. Nonetheless, the each day RSI is approaching the oversold area, suggesting a possible consolidation earlier than draw back continuation.
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Alternatively, transferring again above the 1.3900 degree might collect shopping for traction and transfer to 1.3950, forward of 1.4000. Nonetheless, the trail of least resistance lies on the draw back.
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