Although Wednesday’s US economic data were positive, the greenback continues to lose positions. The US dollar index declined to the support at $93.50. No significant data will be released on Thursday. As a result, there are risks of the further fall.
On Wednesday, the US dollar strongly depreciated against the Canadian dollar. The weakening greenback and encouraging Canadian economic data caused the USD/CAD pair’s fall. USD/CAD broke the support at 1.2930 (50.0 Fibo level) and tested the next support at 1.2860. The further direction of the pair will depend on Wednesday’s crude oil inventories data. If the figure is negative, the oil will increase, and as a result, the Canadian dollar will rise. Moreover, on Thursday, investors will take into consideration a speech of the Bank of Canada Governor Mr. Poloz (18:15 MT time). If the Governor gives some positive clues on the future monetary policy, the Canadian dollar will be able to strengthen more. Moreover, on the 4-hour chart, the pair tested the 100-hour MA and the 200-hour MA. If the pair is able to close below the 200-hour MA, the further fall is anticipated. Next supports are at 1.2860 and 1.28. However, if the US dollar becomes stronger on Thursday and the news for the Canadian dollar isn’t encouraging, the pair will return to 1.2975.
Despite the depreciation against other currencies, the US dollar is still strong against the Japanese yen. USD/JPY rebounded from the support at 109.70. Up to now, the pair is trading near the 200-day MA (110.20) and the 50-week MA, they are a strong resistance. If the pair isn’t able to break the resistance, the pair will continue to trade within 109.70 – 110.20. Otherwise, the pair will move further to 110.85.
On December the 3rd Canada reported a 6% unemployment rate, while the expectations were at a 6.6% level. Less than expected unemployment rate is always hawkish news for the national currency.
For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
Although the last week was intense, this one may be more dynamic and volatile. After the FOMC meeting and controversial decisions from the Bank of England, we saw a historical pound decrease, and the gold plunge. And there’s even more for you.
After the US CPI last week came out above the forecast, traders started expecting a 75-basis point rate hike…
In this video, we will talk about the potential change of a trend in the euro, another stock rally amid a global downtrend, gold prospects, and news that shakes the world right now. It’ll be a helpful video you don’t want to miss.
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