Market news

16 December 2021

USD/CAD slides under 1.2800 amid an upbeat market as oil rises

  • The US dollar is under heavy selling pressure, down some 0.55% against the Loonie.
  • The Fed hawkish monetary policy decision was seen as a “buy the rumor, sell the fact” event, as shown by US equities at all-time highs.
  • USD/CAD Technical Outlook: A double-top in the daily chart looms with a target of 1.2400.

After a spike towards 1.2937 on Wednesday, the USD/CAD grinds lower during the New York session, trading at 1.2770 at the time of writing. The market sentiment has improved as witnessed by European equities rising, while stock indices fluctuate between gainers and losers on the US.

On Wednesday, the Federal Reserve unveiled its monetary policy meeting, where policymakers decided to increase the bond taper speed, eyeing March of 2022 as the end of the coronavirus-pandemic stimulus. Further, it released the dot-plot, a part of its Summary of Economic Projections (SEP), which depicts that the board members’ median expects at least three rate hikes in 2022, in line with market participants’ expectations.

That said, the Federal Reserve monetary policy decision turned to a “buy the rumor, sell the fact event,” with equities rallying to all-time-highs post-Fed. At the same time, risk-sensitive currencies like the GBP, the CAD, and the antipodeans climbed against the greenback. 

In the meantime, Western Texas Intermediate (WTI) irises some 1.60%, trading at $72.85, a tailwind for the oil-linked Canadian dollar. 

The US 10 year Treasury yield is down almost three basis points, sitting at 1.433%, a headwind for the greenback, with the US Dollar Index, which measures the buck’s performance against a basket of six rivals, slips 0.42%, currently at 96.10.

In the US economic docket, the Initial Jobless Claims for the week ending on December 11 rose to 206K, more than the 200K, a tick higher than the previous one. Concerning Continuous Claims, fell to 1.845M, from 1.999 on the week previous, and better than the 1.934M estimated. 

Further, US Housing Starts rose to 11.8% yearly based, while Building Permits increased by 3.6%.

USD/CAD Price Forecast: Technical outlook

USD/CAD Wednesday’s upward move faced strong resistance at the August 20 high at 1.2948, then retreated the move to close below the December 3 high at 1.2853. That said, as shown by the daily chart, it formed a double-top chart pattern with bearish implications. 

However, to confirm its validity would need a sustained break under 1.2605, which will target a move towards the October 23 high at 1.2400.

 

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location