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USD/CAD: Canadian Dollar Breaks Above 1.33, GDP Declines

By Kenny FisherForexNov 30, 2018 10:06
USD/CAD: Canadian Dollar Breaks Above 1.33, GDP Declines
By Kenny Fisher   |  Nov 30, 2018 10:06
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The Canadian dollar has inched higher in the Friday session. Currently, USD/CAD is trading at 1.3296, up 0.10% on the day. On the release front, Canada’s GDP disappointed in September, coming in at -0.1%. This missed the estimate of 0.1%. The Raw Materials Price Index fell 2.4%, better than the forecast of -5.2%. In the U.S., Chicago PMI is expected to edge up to 58.6 points. As well, the G-20 begins a two-day summit in Argentina.

Canadian officials are keeping a nervous eye on the G-20 summit in Argentina. The highlight of the two-day meeting promises to be the tête-à-tête on Saturday between U.S. President Donald Trump and Chinese President Xi Jinping. The full-blown trade war has taken a bite out of both economies and if threatens to dampen global economic growth. Will the sides make some progress, or will Trump make good on his threat to slap China with higher tariffs? Given Trump’s unpredictability, it’s anyone’s guess how the meeting will go, but good or bad, traders can expect the equity and currency markets to respond on Monday.

The Federal Reserve has made a sharp U-turn on monetary policy, catching the markets off guard. Chair Jerome Powell was unexpectedly dovish in his remarks at an event in New York, saying that the current benchmark rate of 2-2.5 percent is “just below” the neutral range. This is in sharp contrast to Powell’s remarks just last month, when he said that rates were “a long way from neutral.” The backtrack is likely due to the change in economic conditions in recent weeks – GDP has been slowing, the stock markets are down and oil prices have fallen. The Fed may have decided that this required an easing up on rate hikes in 2019, and Powell delivered this message to the markets. Just a few weeks ago, there was talk of up to four rate hikes in 2019, but this could be scaled back to just one or two rate increases. Despite Powell’s new dovish stance, the odds of a hike in December have actually increased this week, with the CME pegging the odds at 82%.

USD/CAD Fundamentals

Saturday (December 1)

  • Day 2 – G20 Meetings

USD/CAD for Friday, November 30, 2018

USD/CAD for Nov. 29-30, 2018.
USD/CAD for Nov. 29-30, 2018.

USD/CAD, November 30 at 6:20 EST

Open: 1.3284 High: 1.3328 Low: 1.3273 Close: 1.3298

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3099 1.3198 1.3292 1.3383 1.3461 1.3552

USD/CAD was flat in the Asian session and has edged higher in European trade. The pair posted slight gains early in the North American session but has retracted

  • 1.3292 has switched to a support role after gains by USD/CAD on Friday
  • 1.3383 is the next resistance line
  • Current range: 1.3292 to 1.3383

Further levels in both directions:

  • Below: 1.3292, 1.3198, 1.3099 and 1.2970
  • Above: 1.3383, 1.3461 and 1.3552

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

USD/CAD: Canadian Dollar Breaks Above 1.33, GDP Declines

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USD/CAD: Canadian Dollar Breaks Above 1.33, GDP Declines

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