- USD/CAD drops to near 1.3360 on upbeat market sentiment.
- A quite action is anticipated ahead of the US Inflation data.
- Oil prices recover amid uncertainty over commercial shipment from Red Sea.
The USD/CAD pair drops to near 1.3360 after failing to sustain above the crucial resistance of 1.3400. The Loonie asset continues to struggle as demand for safe-haven assets has dampened due to improved risk-appetite of the market participants.
S&P500 futures extended rally in the Asian session, portraying improved appeal for risk-sensitive assets. The US Dollar Index (DXY) has corrected to near 102.20 as bets in favour of first rate-cut by the Federal Reserve (Fed) in March after a historically tight rate-hiking campaign remains intact ahead of the United States Consumer Price Index (CPI) data for December, which will be published at 13:30 GMT.
The annual headline inflation data is forecasted to grow by 3.2%, slightly higher than November’s reading of 3.1%. In the same period, the core CPI that excludes volatile food and oil prices is seen rising at a slower pace of 3.8% against 4.0%.
On the oil front, oil prices deliver a moderate recovery to near $72.00 as tensions in Middle East region deepens. Attacks on commercial oil tankers passing through Red Sea are delaying shipment and resulting in supply shortage. It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.
USD/CAD continues to consolidate in a range of 1.3340-1.3400 on an hourly scale. The Loonie asset struggles for a direction as investors await the US data. Horizontal resistance plotted from December 15 high around 1.3405 continues to act as barricade for US Dollar bulls.
The 200-period Exponential Moving Average (EMA) around 1.3350 will act as a major cushion to the US Dollar.
The Relative Strength Index (RSI) (14) oscillates in a 40.00-60.00 range as investors await a potential economic trigger.
Fresh upside would appear if the Loonie asset breaks above January 9 high of 1.3415. This would open upside towards December 3 low at 1.3480, followed by December 5 low at 1.3540.
On the flip side, a downside move below January 5 low at 1.3288 would expose the asset to December 22 low at 1.3220. Breach of the latter would build more pressure on the asset and will drag it towards December 27 low at 1.3177.
USD/CAD hourly chart
-638405573711088735.png)
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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.