6 Jan 2014
USD/CAD is consolidating after slight decline
USD/CAD has moved slightly lower Monday morning amid USD selling against Japanese Yen; the pair opened at 1.0633 and retraced to intraday lows at 1.0608.
CAD is afraid of deflation
Canadian currency started the first full trading week of the year on the positive note as the USD/CAD traders preferred to ignore lower China Service PMI (50.9 in December against 52.5 in November). The movements in the pair is currently influenced by USD dynamics. Though considering the Canada related factors the CAD recovery is doomed to be short-lived. Bank of Canada policy makers warned of deflationary risks and thus hinted on possible monetary policy easing. Crude oil prices are falling, which is bad news for the Canadian economy dependent on oil export; consumer spending is slowing down undermining the economic recovery. None of the above mentioned factors is supportive for the CAD strengthening in the long run. Today we have a couple of inflation related reports from Canada, namely Raw Material Price Index and Industrial Product Price for November. Let’s wait and see whether they will confirm the Central Bank deflation worries.
What are today’s key USD/CAD levels?
Today's central pivot point can be found at 1.0637, with support below at 1.0601, 1.0562 and 1.0526, with resistance above at 1.0676, 1.0712, and 1.0751 Hourly Moving Averages are bearish, with the 200SMA at 1.0643 and the daily 20EMA at 1.0632. Hourly RSI is neutral at 43.96.
CAD is afraid of deflation
Canadian currency started the first full trading week of the year on the positive note as the USD/CAD traders preferred to ignore lower China Service PMI (50.9 in December against 52.5 in November). The movements in the pair is currently influenced by USD dynamics. Though considering the Canada related factors the CAD recovery is doomed to be short-lived. Bank of Canada policy makers warned of deflationary risks and thus hinted on possible monetary policy easing. Crude oil prices are falling, which is bad news for the Canadian economy dependent on oil export; consumer spending is slowing down undermining the economic recovery. None of the above mentioned factors is supportive for the CAD strengthening in the long run. Today we have a couple of inflation related reports from Canada, namely Raw Material Price Index and Industrial Product Price for November. Let’s wait and see whether they will confirm the Central Bank deflation worries.
What are today’s key USD/CAD levels?
Today's central pivot point can be found at 1.0637, with support below at 1.0601, 1.0562 and 1.0526, with resistance above at 1.0676, 1.0712, and 1.0751 Hourly Moving Averages are bearish, with the 200SMA at 1.0643 and the daily 20EMA at 1.0632. Hourly RSI is neutral at 43.96.