USDCAD jumped following the release of upbeat data from the United States earlier today (ADP and ISM services). Drop in oil prices following release of DOE data also contributed to weakness of the Canadian dollar against the US dollar. While the pair has been strengthening since European morning, release of the aforementioned data pushed the pair to daily highs. However, as the time passed the situation began to reverse - USDCAD began to erase gains, even as crude prices held lower.
A look at USDCAD at daily intervals shows that the pair failed to break above the 200-session moving average in the 1.2445 area (purple line). Shape of today's daily candlestick suggests that the ongoing, brief upward correction may be about to end. Note that today's daily high was reached just a touch below the upper limit of the local market geometry in the 1.2460 area, what further supports bearish reversal. The pair is likely to become more volatile when the FOMC announces a monetary policy decision today at 6:00 pm GMT. Taper announcement looks like a done deal but size and timing of tapering is uncertain. Should the Federal Reserve decide on a large tapering (i.e $20 billion less in monthly purchases) with immediate launch (in November), USD may strengthen and USDCAD may rise along.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
