USD / CAD down from daily highs around 1.2700 after FOMC Minutes

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  • The USD / CAD hovers around 1.2668 after the publication of the last Minutes of the FOMC.
  • FOMC Minutes: Some participants would like to adjust the QE taper pace and raise rates earlier than anticipated if inflation rises.
  • The US dollar index publishes new 16-month highs close to 97.00 day after day.

The USD / CAD it falls from daily highs around 1.2700, down 0.09%, trading at 1.2661 during the American session at the time of writing. A risk-averse market sentiment stimulated demand for the dollar as it continues to record new highs for the year against most G8 currencies, except the Canadian dollar, as the Minutes of the FOMC meeting were released. .

On Wednesday, the Federal Reserve released the latest minutes from the FOMC meeting, which showed that some participants would like to adjust the QE taper pace and raise rates earlier than expected if inflation soars.

According to Reuters, “some participants suggested that reducing the pace of net asset purchases by more than $ 15 billion each month could be justified.” In addition, it is worth noting that “some participants preferred a somewhat faster rate of reductions that would lead to an earlier conclusion of net purchases.”

Meanwhile, the US dollar index measures the dollar’s performance against a basket of six rivals, is up 0.41% to 96.80 at press time, but previously hit a new 16-month high at 96.93.

At the beginning of the American session, initial jobless claims for the week ending November 20 rose to 199,000, better than the 260,000 estimated by analysts, the lowest since 1969. In addition, US GDP fell. the third quarter grew 2.1% in line with the expectations of market participants.

Turning to the Federal Reserve’s favorite inflation gauge, the Personal Consumption Expenditure (PCE) price index rose 4.1% year-on-year in October, in line with the forecasts of middle economists and confirmed a 0.4% rise from the reading. revised up from 3.7% last month.

USD / CAD Price Forecast: Technical Outlook

The USD / CAD pair fell from the daily highs of 1.2700, at press time it is trading below the November 23 low at 1.2660. In the event of achieving a daily close below the aforementioned, there are signs of intense selling pressure above the open / close of price action on Wednesday, opening the door for further bearish movement.

In that result, the first support level would be the psychological 1.2600. A breakout of the latter would expose the 100-day moving average (DMA) at 1.2557, immediately followed by the 50-day DMA at 1.2529, and then the 1.2500 figure.

Additional technical levels

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