Dollar/CAD advanced to higher ground but dropped sharply on excellent Canadian data. The highlight of the week is clearly the rate decision, but there are quite a few other events. Here are the highlights and an updated technical analysis for USD/CAD.
Canada gained no less than 79.5K jobs in November and alongside a small beat on GDP, the C$ made a big jump. OPEC decided to extend the production cuts for yet another 9 months, not an earth-shattering decision, and oil consolidated the previous gains. In the US, a mix of hopes for tax reform, excellent data, and also upbeat comments from Fed officials supported the greenback.
USD/CAD daily chart with support and resistance lines on it. Click to enlarge:
* All times are GMT
USD/CAD Technical Analysis
Dollar/CAD traded under 1.2790 (mentioned last week) early in the trading week.
Technical lines from top to bottom:
1.3160 provided support back in June. 1.3020, just above the round level of 1.30, worked as resistance back in July.
1.2920 capped the pair in late October and turned into a double-top in No. It is followed by 1.2840 capped the pair in mid-November and also had a role in the past.
1.2790 was the high in mid-November and serves as resistance. 1.2665 was a was a double-bottom in November and works as strong support.
It is followed by 1.26, a round number that worked as resistance in October. 1.2540 capped the pair in early October when it traded in a narrow range.
1.2435 was a cushion for the pair during the month of October. 1.2335 gave support to the pair in late September.
I turn from bullish to neutral on USD/CAD
The data coming out of Canada is certainly encouraging but the negative bias against the loonie may need time to disappear. In addition, OPEC’s decision was not bold enough to push oil prices much higher. The US has its own issues, but also enjoys robust growth. All in all, the picture is more balanced now.
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