- The US dollar is under heavy selling pressure, down some 0.55% against the Loonie.
- The Fed hawkish monetary policy decision was seen as a “buy the rumor, sell the fact” event, as shown by US equities at all-time highs.
- USD/CAD Technical Outlook: A double-top in the daily chart looms with a target of 1.2400.
After a spike towards 1.2937 on Wednesday, the USD/CAD grinds lower during the New York session, trading at 1.2770 at the time of writing. The market sentiment has improved as witnessed by European equities rising, while stock indices fluctuate between gainers and losers on the US.
On Wednesday, the Federal Reserve unveiled its monetary policy meeting, where policymakers decided to increase the bond taper speed, eyeing March of 2022 as the end of the coronavirus-pandemic stimulus. Further, it released the dot-plot, a part of its Summary of Economic Projections (SEP), which depicts that the board members’ median expects at least three rate hikes in 2022, in line with market participants’ expectations.
That said, the Federal Reserve monetary policy decision turned to a “buy the rumor, sell the fact event,” with equities rallying to all-time-highs post-Fed. At the same time, risk-sensitive currencies like the GBP, the CAD, and the antipodeans climbed against the greenback.
In the meantime, Western Texas Intermediate (WTI) irises some 1.60%, trading at $72.85, a tailwind for the oil-linked Canadian dollar.
The US 10 year Treasury yield is down almost three basis points, sitting at 1.433%, a headwind for the greenback, with the US Dollar Index, which measures the buck’s performance against a basket of six rivals, slips 0.42%, currently at 96.10.
In the US economic docket, the Initial Jobless Claims for the week ending on December 11 rose to 206K, more than the 200K, a tick higher than the previous one. Concerning Continuous Claims, fell to 1.845M, from 1.999 on the week previous, and better than the 1.934M estimated.
Further, US Housing Starts rose to 11.8% yearly based, while Building Permits increased by 3.6%.
USD/CAD Price Forecast: Technical outlook
USD/CAD Wednesday’s upward move faced strong resistance at the August 20 high at 1.2948, then retreated the move to close below the December 3 high at 1.2853. That said, as shown by the daily chart, it formed a double-top chart pattern with bearish implications.
However, to confirm its validity would need a sustained break under 1.2605, which will target a move towards the October 23 high at 1.2400.
-637752718090648444.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
Gold gives away some gains, slips back to $2,980
Gold retraced from its earlier all-time highs above the key $3,000 mark on Friday, finding a footing around $2,980 per troy ounce. Profit-taking, rising US yields, and a shift to a risk-on environment seem to be putting the brakes on further gains for the metal.
EUR/USD remains firm and near the 1.0900 barrier
EUR/USD is finding its footing and trading comfortably in positive territory as the week wraps up, shaking off two consecutive daily pullbacks and setting its sights back on the pivotal 1.0900 mark—and beyond.
GBP/USD remains depressed, treads water in the low-1.2900s
GBP/USD is holding steady in consolidation territory after Friday’s opening bell on Wall Street, hovering in the low-1.2900 range. This resilience comes despite disappointing UK data and persistent selling pressure on the USD.
Crypto Today: BNB, OKB, BGB tokens rally as BTC, Shiba Inu and Chainlink lead market rebound
Cryptocurrencies sector rose by 0.13% in early European trading on Friday, adding $352 million in aggregate valuation. With BNB, OKB and BGB attracting demand amid intense market volatility, the exchange-based native tokens sector added $1.9 billion.
Week ahead – Central banks in focus amid trade war turmoil
Fed decides on policy amid recession fears. Yen traders lock gaze on BoJ for hike signals. SNB seen cutting interest rates by another 25bps. BoE to stand pat after February’s dovish cut.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.