The USD/CAD is under pressure
Jason Lubin January 1, 2021 7:00 AM
If the USD/CAD finds support at 1.2690, it could be the beginning of trading range.
The US Dollar was bullish against most of its major pairs on Thursday with the exception of the AUD, CAD and GBP. On the US economic data front, Initial Jobless Claims dropped to 787K for the week ending December 26th (835K expected), from a revised 806K in the previous week. Finally, Continuing Claims fell to 5,219K for the week ending December 19th (5,370K expected), from a revised 5,322K in the week before.
On Friday, US markets will be closed to observe New Years Day.
The Euro was bearish against all of its major pairs. In Europe, no major economic data was released.
The Australian dollar was bullish against most of its major pairs with the exception of the GBP.
Regarding the week's U.S. economic data front:
Wholesale Inventories fell 0.1% on month in the November preliminary reading (+0.6% expected), compared to a revised +1.2% in the October final reading.
Market News International's Chicago Business Barometer unexpectedly rose to 59.5 on month in December (56.3 expected), from 58.2 in November.
Finally, Pending Home Sales declined 2.6% on month in November (0% expected), compared to a revised -0.9% in October.
From a technical point of view, on a daily chart, the USD/CAD currency pair sold off this week after its short-term rally following the upside breakout from a descending broadening wedge pattern last week. The simple moving averages (SMAs) are arranged in a bearish manner, as the 20-day SMA is below the 50-day SMA. The overall bias remains bearish, however the USD/CAD could find support at 1.2690 again and bounce towards 1.2955. If this occurs it is likely the pair could move sideways in a consolidation range. If the pair breaks out below 1.2690, then its next support level would be 1.2530. If the pair breaks out above 1.2955, then the pair could rally towards 1.3120.
Source: GAIN Capital, TradingView
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.