- The USD/CAD had cleared the 1.3500 handle in Tuesday trading.
- The oil-backed Loonie is unable to find gains as the DXY captures the broader market.
- US data to feature heavily in the back half of the week.
The USD/CAD has decisively reclaimed the 1.3500 major handle for Tuesday. The US Dollar Index (DXY) is pumping higher across the entire market, bolstered by a hawkish Fed and risk aversion taking a bite out of the market's appetite for riskier assets.
The broad US Dollar Index (DXY) is at its highest levels since last November, and the Greenback (USD) is taking a step higher. Even with oil prices rising for Tuesday which would normally prop up the Loonie (CAD), the USD is still the clear winner on the charts.
US Treasury yields are knocking on multi-year highs with the 10-year Treasury yield holding above 4.5%, pushing the USD higher. US markets are increasingly concerned about a potential US government shutdown looming, knocking risk appetite even further back.
Economic calendar: US figures in focus
On the data docket it's notably CAD-thin, leaving investors to focus almost entirely on US data for this week.
Tuesday saw US Housing Price Index figures cleanly beat expectations, printing at 0.8%, leaping over the forecast 0.5% and doubling the previous reading of 0.4%.
Wednesday will bring US Durable Goods Orders (forecast: -0.5%, previous -5.2%), and investors will be focusing on US Gross Domestic Product (GDP) figures due on Thursday. Median market forecasts are anticipating a steady print at an annualized 2.1% for the second quarter.
The trading week will close out with US Personal Consumption Expenditure (PCE) Price Index data on Friday. PCE, the Federal Reserve's (Fed) preferred US inflation measure, is expected to hold steady at 0.2% for the month of August.
A data beat could see the Greenback clear even further ground with Fed policymakers already leaning towards the potential for further rate hikes in the future if inflation refuses to bed down.
USD/CAD technical outlook
The Greenback is up 0.3% against the Loonie in Tuesday's market session, vaulting the 1.3500 mark and poised to extend further beyond the 200-hour Simple Moving Average (SMA) currently chalked in near 1.3480.
Near-term resistance is coming from last week's swing high near 1.3525, and intraday bullish momentum might find a covering pullback from here.
On the daily candlesticks, the USD/CAD is geared for a decisive split from the 200-day SMA, which has constrained price action for several days and is currently settling just north of 1.3450. An extended bull run will see the pair set for a re-challenge of early September's peak of 1.3695.
USD/CAD daily chart
USD/CAD technical levels
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
EUR/USD recovers to 1.0300 as traders await US NFP
EUR/USD has erased losses to trade modestly flat at around 1.0300 in European trading on Friday. However, concerns over US President-elect Trump's policies and hawkish Fed expectations keep the US Dollar afloat ahead of the US Nonfarm Payrolls data, capping the pair's rebound.
GBP/USD bounces back to 1.2300, US NFP eyed
GBP/USD is bouncing back to near 1.2300 after finding fresh demand in the European session on Friday. Despite the rebound, the pair remains vulnerable amid persistent US Dollat strength and the UK bond market turmoil. The focus now shifts to the US labor market data for fresh directives.
Gold price prolongs multi-day-old uptrend, refreshes multi-week top ahead of US NFP
Gold price (XAU/USD) gains some follow-through positive traction for the fourth consecutive day and touches a fresh four-month peak, around the $2,680 region during the first half of the European session on Friday.
Nonfarm Payrolls forecast: US December job gains set to decline sharply from November
US Nonfarm Payrolls are expected to rise by 160K in December after jumping by 227K in November. US jobs data is set to rock the US Dollar after hawkish Fed Minutes published on Wednesday.
How to trade NFP, one of the most volatile events Premium
NFP is the acronym for Nonfarm Payrolls, arguably the most important economic data release in the world. The indicator, which provides a comprehensive snapshot of the health of the US labor market, is typically published on the first Friday of each month.
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.