- USD / CAD reached a new weekly high at 1.2836.
- Fed Chairman Powell: “It is time to withdraw the word Transient to inflation.”
- Jerome Powell favors a faster reduction of the union and would talk about accelerating the reduction of QE at the next meeting.
The pair USD / CAD It is recovering during the American session, trading at 1.2820 at the time of writing. In the overnight session, the CAD had the upper hand against the dollar, amid a recovery in oil prices, after an overextended slide on Friday of last week that witnessed a 12% drop on the day. However, Moderna’s CEO comments that a drop in the current efficacy of COVID-19 vaccines led to an increase from 1.2740 to 1.2790, which ultimately managed to follow up on Federal Reserve Chairman Jerome Powell’s remarks during a hearing at the US Senate Committee on Banking and Housing |
Fed Chairman Powell said the high prices are attributed to supply and demand problems, although he stressed that such increases have been widespread. In addition, he pointed out that the “risks” of higher inflation have increased and said that it is time to withdraw the word “Transitory” when talking about inflation.
Powell added that it is “appropriate to consider wrapping up the reduction a few months earlier” and said he would talk about accelerating the withdrawal of the pandemic bond buying stimulus at the next FOMC meeting.
When asked about the Omicron COVID-19 variant, he said that “you will know in a week or 10 days, you can only assess the impact on the economy at that time.”
The US macroeconomic record so far featured the S & P / Case-Shiller Home Price Index (MoM) for September, which was up 19.1%, more than the 19.3% expected. Meanwhile, the Chicago Purchasing Managers Index for November rose to 61.8, down from an estimated 67.
USD / CAD Price Forecast: Technical Outlook
The 1-hour chart of USD / CAD shows that the pair has an upward bias, as confirmed by the upward sloping hourly Simple Moving Averages (SMA), which resides below price. At press time, the bullish move was triggered once the Fed’s Powell said it was time to remove the word Transitional for inflation with a cap around the daily R2 pivot point at 1.2822.
As a result of extending the rally, the first resistance would be the daily high of the American session, reached at 1.2836, followed by the daily pivot R3 at 1.2852, followed by 1.2900.
On the other hand, the confluence of November 29 around 1.2800 would be the first demand zone. A breach of the latter would expose the R1 daily pivot at 1.2780, followed by the 50 hourly simple moving average at 1.2761.
Technical levels
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