HotForex

Loonie looks ready to shift in outlook

Long
FX_IDC:USDCAD   U.S. Dollar / Canadian Dollar
USDCAD has dropped for a second straight day, putting in some more distance from the 20-month peak that was seen at 1.3663. A rise in oil prices amid a revival in risk appetite in global markets has helped the Canadian Dollar , while US Fed funds futures have now priced out Fed tightening expectations for 2019 and are factoring in a 25 bp rate cut at the 18-month horizon.

USDCAD has descended into two-week low territory under 1.3431. The early December low at 1.3160 provides a downside waypoint. Immediate support is set at S2 at 1.3350, which coincides with 50-day EMA . Resistance for today is set at 1.3495 (4 consecutive session peak in the 4 hour chart). In the long-term Resistance stands at the 2018 peak, at 1.3663.

Focus today will be on the dual releases of the US and Canadian jobs reports for December. The US version is expected to show a 205k headline rise (median 177k), with the unemployment rate ticking down to a new cycle low of 3.6% from 3.7% in the prior three months.

On balance, the data should be supportive of USDCAD .


Andria Pichidi

Market Analyst

HotForex

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