FXOpen
This morning, 1 USD was selling for less than 1.354 Canadian dollars – for the first time since October 1st.
The strengthening of the Canadian dollar and the weakening of the USD was facilitated by the news published yesterday:
→ Canada's real gross domestic product (GDP) grew by 0.1% in September, which exceeded analysts' expectations and reduced the relevance of the recession scenario in Canada.
→ The number of applications for unemployment benefits in the US for the week amounted to 218k (a week earlier it was 211k), which may indicate a cooling of the US economy.
→ The price index for personal consumption expenditures (PCE) fell to 3% from the previous value of 3.4%. While 3% remains too high to declare victory over inflation, it marks a new series low that is sure to reduce the likelihood of a Fed rate hike.
In our previous analysis of the USD/CAD market, we wrote that the price could form a rebound from support in the area of 1.36625. However, the rebound to point E was very weak, and after the breakdown, the level 1.36625 showed resistance properties.
At the same time, the situation on the chart looks bearish:
→ price dynamics formed decreasing lows A-B-C-D;
→ the bullish trend line (shown in black) is broken;
→ price dynamics form new lows and a downward channel (shown in red).
If we assume that the market will recover from oversold conditions (the RSI indicator is close to going below the 0.3 level), the USD/CAD rate in this case may find resistance from the median line of the channel and the level of 1.36625.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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