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.
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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
