- The Dollar remains sold weighed by Wednesday’s Fed pivot.
- The upbeat retail sales and jobless claims have failed to support the USD.
- USD/CAD approaches important support at 1.3415 with oscillators at strong oversold levels.
The US Dollar remains under strong bearish pressure on Thursday. The combination of an unexpectedly dovish Fed and a significant recovery on Oil prices is sending the pair close to the support area at 1.3410.
The upbeat US macroeconomic data seen on Thursday, with Retail sales increasing against expectations and Jobless claims declining, has failed to provide support to an ailing USD.
A dovish Fed and higher Oil prices have hammered the USD
On Wednesday the Federal Reserve hinted at the end of rate hikes, with 17 out of 19 policymakers anticipating rate cuts in 2024. The dop plot reflected a median of 75 bps cuts next year, up from the 50 bps cuts seen at September’s meeting.
Beyond that, Crude Oil, Canada’s main export has appreciated nearly $4, with the US Benchmark WTI returning above $70. This is providing additional support to the loonie.
The technical picture shows the USD under strong bearish pressure, although the strong oversold levels and the vicinity of the 1.3415 support area might allow for some correction.
Below here, the next targets would be late September lows at 1.3375 and the August 4 low at 1.3320.
On the upside, resistances are at 1.3480 and 1.3545 previous support levels.
Technical levels to watch
This news piece was corrected on December 14 at 14:22 GMT: The term "resistance" was replaced by "support" in the title and 1.2420 was changed to 1.3415 in the fifth paragraph.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD regained the smile…and the 200-day SMA
AUD/USD added to the positive start to the week and extended its bullish performance, surpassing the 0.6600 barrier and putting the critical 200-day SMA to the test.
EUR/USD remains well bid above 1.0900 ahead of US election results
EUR/USD built on Monday’s marginal gains and advanced further north of 1.0900 the figure on the back of the persistent selling bias in the US Dollar ahead of the FOMC event and the US election results.
Gold extends consolidative phase as US election result looms
Gold attracts dip-buyers after touching a one-week low on Tuesday but remains below $2,750. The benchmark 10-year US Treasury bond yield stays in positive territory above 4.3% as markets eye US election exit polls, limiting XAU/USD's upside.
Ethereum Price Forecast: ETH could rise 10% upon a Trump win, investors de-risk ahead of election results
Ethereum (ETH) is trading near $2,450 on Tuesday, but it could stage a 10% rise to test the $2,707 key resistance level if Donald Trump wins the US presidential election.
US election day – A traders’ guide
Election day volatility: Brace for potential wild market swings. Election days bring opportunities, but also risks. Unclear results can increase volatility further.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.