USDCAD, H1 & Daily
USDCAD has vaulted to a December high at 1.3292, closing the technical gap from the open on Sunday evening. A turn lower in oil prices (down over 1.5% at the time of writing) and a broad rebound in the U.S. Dollar have driven USDCAD higher. The pair remains in a broadly positive, although choppy, range that’s been unfolding for two weeks now. The daily chart dipped under the 20-day moving average on Monday for the first time in 33 trading days, only to reverse again yesterday. The November high at 1.3355 and R3 at 1.3400 are the next resistance areas. Support resides at the daily pivot point and the 20-day moving average at 1.3226 and yesterday’s low and the 50-day moving average at 1.3150.
A safe haven dynamic has been buoying the US currency, despite lower Treasury yields amid an ongoing re-calibration of Fed policy expectations, where markets are now discounting a pause in the cycle, following a hike this month. BOC meets on policy later today, where no change is widely anticipated. This would leave the overnight policy interest rate at 1.75%. There is a risk dovish-leaning remarks given the terms-of-trade impact of the 30%-plus plunge in oil prices since early October, and the crude output cuts in Alberta.
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Stuart Cowell
Head Market Analyst
HotForex
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