The USD/CAD parity is testing the psychological level of 1.3400
- The USD/CAD pair is under pressure in the forex below 1.3440/50 and the trendline.
- The FOMC minutes are followed by the direction of the US dollar.
The Canadian dollar weakened in forex on Wednesday against the US dollar and all other G10 currencies as oil prices fell. USD/CAD is up 0.3% after traveling between a low of 1.3356 and a high of 1.3440 so far ahead of Bank of Canada Governor Tiff Macklem’s parliamentary comparison and Federal Committee minutes of the Free Market.
the pair USD/CAD With the pressures mounting, I have despite the falling dollar in South American forex which tracks a slew of US economic data (and includes durable goods orders, PMIs, claims, new home sales and the final Michigan sentiment). The data, for the most part, was solid, but the focus was on the shocking US manufacturing PMI result that missed expectations by a mile:
US: S&P Global Manufacturing PMI hit 47.6 in November vs. 50 participants
Nevertheless, you oil price Exploded lower on Wednesday as China continued to battle rising Covid-19 infections, imposing mass testing and containment measures, slowing economic growth and reducing demand for oil from the world’s top importer. At the same time, the European Union is preparing to impose a price cap on Russian oil exports. Additionally, a report to mount a bigger decline than previous US stocks.
In addition to the FOMC minutes, Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers will appear before the House of Commons Standing Committee on Finance at 4:30 p.m. ET (21:30 GMT).
Today’s PMI data gave the US Dollar a head start ahead of the FOMC minutes release. Crucially, recent consumer price data in the U.S., colder than expected, has already created the feeling of a Fed pivot and investors are hoping the central bank might be able to moderate its pace. of increase. In the previous statement, the writing was “In determining the pace of future increases in the target range, the Committee takes into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation , and economic and financial developments.
That statement caused markets to consume it, with investors positioning themselves for a softer approach from the Fed, which Chairman Jerome Powell pushed back against in his presser suggesting that he and will likely have a lower terminal rate. high Accordingly, the minutes will be reviewed for clarity in this regard. “We expect the November FOMC meeting minutes to shed light on the FOMC’s deliberations regarding the expected slowing in the pace of rate hikes scheduled for the meetings,” analysts at TD Securities said.
“But above all, we expect the minutes to put a lot of emphasis on the likelihood that the terminal rate will end up being higher than initially expected. The Fed still needs to grind the labor market to bring growth into line with salaries and household expenditure at rates more consistent with the inflation target.
In such a scenario, it could put a bid on the US dollar that was trampled before the event. However, USD/CAD sits at the top of a trend and below a daily leading pattern, as illustrated below:
USD/CAD analysis technique
USD/CAD broke the trend line this month and corrected into resistance with prospects for further downside, as also illustrated on the following hourly chart:
Pair Ross J Burland, FXStreet
Ross Burland began his career in Forex trading after the City of London in 2001. Initially employed by the FX department of Sucden (UK) Ltd as Corporate Sales and Junior Dealer (FSA qualified investment adviser), Ross a I finally executed the institutional FX spot in the market. -doing an office before being recruited to join the FX department of Investec Bank on Gresham Street in a sales/trading client role, specializing in cash management and finance specialization.
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