USD / CAD retreats from daily high hovering around 1.2930
During the New York session, the USD / CAD pair moved lower on the forex, trading at 1.2925 at the time of writing. Market sentiment has improved as evidenced by risk sensitive currencies such as CAD, GBP and AUD which rallied during today’s trading session , while safe havens fall.
- The loonie is up 0.12% against the greenback in a risk-based market climate.
- Rising crude oil prices are supporting the Canadian dollar, the US dollar is weakening.
- Canadian retail sales rose 1.6%, more than the estimated 1.0% as the loonie barely budged.
The positive news about vaccines helping tame the Omicron variant have uplifted investors’ mood. This, along with the high prices of oil crude, with Western Texas Intermediate (WTI), the benchmark U.S. crude oil index up 2.55% to $ 70.36 per barrel, underpins the Canadian dollar, which cuts some of the week’s losses last on forex, as appetite for the US dollar improved.
Meanwhile, the US dollar index, which tracks the performance of the dollar against a basket of six rivals, fell 0.02% to 96.53.
The Canadian economic record showed retail sales for November. Statistics Canada announced that sales rose 1.6% on a monthly basis, more than the estimated 1.0% and a strong rebound from the 0.6% drop in September. Non-auto retail sales rose 1.3%, also stronger than estimates of 0.8%.
Additionally, forex traders on the USD / CAD pair would be looking at US macroeconomic data. On Wednesday, the gross domestic product for the third quarter and the Fed’s preferred inflation indicator, personal consumption expenditure (PCE) prices for the third quarter, will be released. By Thursday, initial jobless claims and lasting good orders would be scrutinized by market participants.
USD / CAD forecast: technical outlook
USD / CAD broke a strong resistance found at the December 3 high at 1.2853. Over the past two days, the pair has traded in a range of 1.2850-1.2960, and as the end of the year approaches, it could likely remain subdued.
If broken up, the first resistance would be 1.3000. A clear break of this level would expose on November 13, 2020, a high at 1.3172.
On the other hand, a failure at 1.2960 would open the door to further losses. The first support would be 1.2900. The breach of the latter could drag the USD / CAD pair towards the previous high of December 3, which became support at 1.2853, then towards the figure of 1.2800.
Par Christian Borjon Valencia, FXStreet
Christian Borjon, Forex News Editor at FX Street, has been an experienced trader for six years in Forex and CFD commodities. He worked at CITI Banamex (CITI branch in Mexico) as a Forex Market Maker for a year and a half. Christian holds a UA Business Administration degree from C, Mexico. Like many other traders, he started taking a course and learning the hard way. Christian later discovered it and became obsessed with fundamental analysis and macroeconomics, as well as its influence on financial markets.
The opinions expressed here are those of the author alone and do not necessarily reflect the views of Forex Quebec. Every investment and trading move comes with risk, you should do your own research when making a decision.
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