USDCAD tumbles ahead of FOMC Minutes
USD erased early gains as traders digested mixed data from the labour market. US job openings fell slightly to 10.45 million in November but remained at considerably high levels, suggesting that wages would increase further as companies try to attract employees. On the other hand, the ISM Manufacturing PMI fell for a second consecutive month to 48.4 last month, however the sub-component- Employment Index increased by 51.4, returning into expansion, showing an improvement in the labor market.
Dollar weakness can be seen across the board, with some of the most pronounced buying activity against risk-sensitive currencies such as the Australian and Canadian dollars. Lonnie is showing considerable strength on Wednesday, despite falling oil prices. Today WTI crude price plunges more than 5.0% dragged down by rising number of persistent coronavirus-related uncertainties in top consumer China and Saudi Arabia plans to lower export prices for oil deliveries to Asia. Usually CAD is highly correlated with OIL.WTI price, however today one can observe that this link is weakening. Now traders focus on the FOMC minutes which will be released at 7:00 pm BST and could provide additional information regarding the next move in interest rates. Given today's data, any remarks regarding the labour market from FED officials could spark additional volatility on the USD pairs.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
USDCAD broke below major support at 1.3510 which coincides with 38.2% Fibonacci retracement of the downward wave launched in mid-October 2022. If current sentiment prevails, downward move may accelerate towards next support at 1.34, which is marked with previous price reactions, lower limit of the 1:1 structure and 23.6% retracement. Source: xStation5
OIL.WTI fell sharply during today's session however it seems that buyers manage to halt declines around major support at $73.60 which is marked with previous price reactions. If today's Minutes turn out to be dovish, then potential upward correction towards local resistance at $76.20 could be launched. On the other hand, if the market will perceive today's report as hawkish, then key support at $70.15 may be at risk. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
