Daily Price Outlook

During the early hours of the European session, the USD/CAD currency pair managed to halt its downward rally and gained traction around the 1.3250 level. The upward trend can be attributed to the recovery in US Treasury bond yields, assisting the US Dollar (USD) in attracting buyers for the third consecutive day. This, in turn, is viewed as a key factor providing support to the USD/CAD pair.

Meanwhile, the upticks in crude oil prices were seen as one of the key factor that underpinned the commodity-linked Loonie and cap further upside in the USD/CAD pair. Furthermore, the dovish expectations regarding the Federal Reserve (Fed) may prevent aggressive bets from USD bulls and could potentially cap the major currency pair.

Anticipated Interest Rate Cut and Economic Outlook: Impact of US Core PCE Price Index Drop

It's worth noting that investors are strongly leaning towards the idea that the US central bank might cut interest rates by March. This belief is backed by a larger-than-expected drop in the US Core Personal Consumption Expenditure (PCE) Price Index, which is the Federal Reserve's preferred measure of inflation.

Despite the robust performance of the US economy, the current situation paves the way for a gradual economic slowdown in 2024, providing the central bank with flexibility to adjust its policies earlier. The increase in US bond yields is also strengthening the US dollar, playing a role in the gains observed in the USD/CAD pair.

Canadian Dollar Dynamics: Oil Price Influence, Interest Rate Speculations, and Global Economic Factors

Moreover, the Canadian Dollar gets a boost as oil prices rise. In the meantime, the head of Canada's central bank, Tiff Macklem, hinted that they might lower interest rates in 2024. This means the Canadian Dollar relies on both oil prices and people's sentiments towards the US dollar. However, the Canadian Dollar is affected by oil and the US dollar, but it's important to be careful due to economic uncertainty.

Therefore, the potential lowering of interest rates in 2024, coupled with economic uncertainty, creates caution in assuming a continued rise of the USD/CAD pair from its recent low, emphasizing the impact of global economic factors.

USD/CAD - Technical Analysis 

The USD/CAD pair showed a marginal increase on Tuesday, trading at 1.32566, up by a mere 0.03%. The currency pair is navigating around a pivot point of 1.3199. Key resistance levels are identified at 1.3232, 1.3288, and 1.3322, while supports are found at 1.3143, 1.3107, and 1.3073, offering a clear framework for potential price movements.

The Relative Strength Index (RSI) is positioned at 53, suggesting a slightly bullish sentiment. The Moving Average Convergence Divergence (MACD) is marginally positive at 0.001, indicating a potential for upward momentum. The pair is currently trading just below the 50-Day Exponential Moving Average (EMA) of 1.3238, a factor that may influence its short-term trajectory.

Considering the technical analysis, the overall trend for USD/CAD appears to be cautiously bullish. A strategic approach could involve a sell limit at 1.33732, with a take profit target at 1.31427 and a stop loss at 1.35216, while keeping an eye on the mentioned technical levels for future direction.

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Daily Price Outlook

- USD/CAD trades at 1.32527, down by 0.12%, with a pivot point at 1.3111 and resistance levels at 1.3189, 1.3296, and 1.3378.

- Technical indicators show an oversold condition with RSI at 28 and MACD at -0.00021, suggesting a bearish sentiment in the short term.

- The currency pair is below the 50 EMA, with a current bearish trend, but potential exists for a reversal if key resistances are tested and surpassed.

In the fluctuating world of forex trading, the USD/CAD pair presents a nuanced picture as it navigates through various economic pressures and market sentiments. As of December 26, the pair is trading at 1.32527, marking a slight decrease of 0.12%. This movement reflects the ongoing tug-of-war between the US and Canadian economies and their respective monetary policies.

The pair's pivot point is set at 1.3111, acting as a critical marker in its price movement. The immediate resistance is found at 1.3189, with further resistance levels at 1.3296 and 1.3378. These points represent potential barriers that the pair might face in its upward journey.

On the downside, the immediate support level lies at 1.2996, followed by subsequent supports at 1.2889 and 1.2778. These levels are essential in determining the pair's stability and potential rebound during a downturn.

The Relative Strength Index (RSI) for USD/CAD is currently at 28, indicating that the pair might be in oversold territory. This suggests a potential rebound or stabilization in the near future.

The Moving Average Convergence Divergence (MACD) stands at -0.00021, just below its signal of -0.00364, hinting at a bearish sentiment in the short term.

Furthermore, the pair's current price is below its 50-Day Exponential Moving Average (EMA) of 1.3274, confirming the bearish trend.

The USD/CAD pair shows a breakout from the upward channel, suggesting a shift in momentum that could lead to a buying trend if sustained.

The overall trend for USD/CAD is currently bearish, below the 1.32900 mark. However, there is potential for change if the pair tests and breaks through the resistance levels in the coming days.

USD/CAD - Trade Idea 

Entry Price – Sell Below 1.3290

Take Profit – 1.31037

Stop Loss – 1.34137

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$186/ -$123

Profit & Loss Per Mini Lot = +$18/ -$12

Daily Price Outlook

Despite the bearish US dollar and higher crude oil prices, the USD/CAD currency pair prolonged its upward trend and remained well bid around above 1.3260 due to the ongoing signs of economic slowdown in Canadian economy. It is worth noting that the Canadian Dollar is facing challenges in attracting buyers due to ongoing signs of an economic slowdown. The latest economic data reveals that the monthly Gross Domestic Product (GDP) of Canada has shown no growth for the fourth consecutive reporting period, remaining flat at 0.0% in October. This follows a downward revision of September's GDP from 0.1% to flat.

Impact of Weaker-than-Expected US Inflation on Fed Rate Hike Expectations

Apart from this, the recent data on US spending suggests that inflation is not as high as expected. This has led people to think that the Federal Reserve might lower interest rates more often and by a larger amount in 2024. The key inflation measure, called the Core PCE Price Index, was 3.2% for the year through November, a bit lower than the predicted 3.3% and down from October.

Investors are now betting that the Federal Reserve will make bigger interest rate cuts next year than the Fed itself has predicted. Money markets indicate potential cuts of over 160 basis points through 2024, compared to the Fed's forecast of 75 basis points by the end of next December.

Therefore, the softer-than-expected US inflation may weaken the USD against the CAD, as it fuels expectations of more frequent Fed rate hikes in 2024.

Geopolitical Tensions and Fed Rate Cut Expectations Drive WTI Crude Oil Prices

WTI Crude oil prices edged up on Tuesday due to heightened geopolitical tensions in the Middle East and optimism about potential interest rate cuts by the U.S. Federal Reserve. Investors are optimistic that rate cuts will spur global economic growth and increase demand for oil. The recent rebound in oil prices is also attributed to concerns about conflict in the Red Sea.

However, the announcement of the resumption of shipping routes by Maersk has eased some supply worries. Furthermore, the expectations of Fed interest rate cuts in response to lower-than-targeted inflation have further supported oil prices, creating a positive outlook for the market.

Therefore, the higher crude oil prices tend to boost the Canadian dollar and may limit some of the gains of the USD/CAD pair.

USD/CAD - Technical Analysis 

In the fluctuating world of forex trading, the USD/CAD pair presents a nuanced picture as it navigates through various economic pressures and market sentiments. As of December 26, the pair is trading at 1.32527, marking a slight decrease of 0.12%. This movement reflects the ongoing tug-of-war between the US and Canadian economies and their respective monetary policies.

The pair's pivot point is set at 1.3111, acting as a critical marker in its price movement. The immediate resistance is found at 1.3189, with further resistance levels at 1.3296 and 1.3378. These points represent potential barriers that the pair might face in its upward journey.

On the downside, the immediate support level lies at 1.2996, followed by subsequent supports at 1.2889 and 1.2778. These levels are essential in determining the pair's stability and potential rebound during a downturn.

The Relative Strength Index (RSI) for USD/CAD is currently at 28, indicating that the pair might be in oversold territory. This suggests a potential rebound or stabilization in the near future.

The Moving Average Convergence Divergence (MACD) stands at -0.00021, just below its signal of -0.00364, hinting at a bearish sentiment in the short term.

Furthermore, the pair's current price is below its 50-Day Exponential Moving Average (EMA) of 1.3274, confirming the bearish trend.

The USD/CAD pair shows a breakout from the upward channel, suggesting a shift in momentum that could lead to a buying trend if sustained.

The overall trend for USD/CAD is currently bearish, below the 1.32900 mark. However, there is potential for change if the pair tests and breaks through the resistance levels in the coming days.

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Daily Price Outlook

- USD/CAD slightly down at 1.3393, indicating cautious market sentiment.

- Technical indicators show mixed signals with RSI bearish at 38 and MACD hinting at upward momentum.

- Near-term outlook bullish above 1.3390, with key resistance and support levels to watch.

The USD/CAD pair on December 19th exhibits a subtle yet complex trading pattern in the forex market. Currently, it records a marginal decline of 0.05%, trading at 1.3393. This level of trading activity indicates a cautious market sentiment towards the currency pair.

Analyzing the 4-hour chart, the pivot point is established at 1.3180. The pair faces immediate resistance at 1.3277, with further resistance expected at 1.3450 and 1.3550. On the other hand, support levels are found at 1.3012, followed by 1.2847 and 1.2670. These key price levels will be critical in dictating the near-term trajectory of the USD/CAD pair.

The technical indicators provide a nuanced view of the pair's potential direction. The Relative Strength Index (RSI) stands at 38, suggesting a bearish sentiment as it falls below the neutral 50 threshold. However, the Moving Average Convergence Divergence (MACD) presents a value of 0.00062 against a signal line of -0.00373, hinting at possible upward momentum. This contrast in indicators underscores the current market uncertainty.

The 50-Day Exponential Moving Average (EMA) at 1.3391 closely aligns with the current trading price, indicating a balanced market outlook. Notably, the Loonie has entered an oversold zone, and the closing of candles over the $1.3350 level could pivot the pair towards a bullish bias today.

In conclusion, the overall trend for the USD/CAD pair appears to be bullish above the 1.3390 level. The short-term forecast suggests that the pair may test higher resistance levels in the upcoming sessions, particularly if it sustains above the critical EMA and support points. Investors and traders should closely monitor these technical indicators and key levels for insights into potential market shifts.

USD/CAD - Trade Idea 

Entry Price – Buy Stop 1.34113

Take Profit – 1.34792

Stop Loss – 1.33524

Risk to Reward – 1: 1.15

Profit & Loss Per Standard Lot = +$679/ -$589

Profit & Loss Per Mini Lot = +$67/ -$58

Daily Price Outlook

Despite the dovish remarks by the Bank of Canada (BoC) Governor Tiff Macklem and the modest US Dollar (USD) uptick, the USD/CAD currency pair failed to stop its losing streak and remained well offered around below the 1.3390 level. However, the reason for its downward trend could be attributed to the recent goodish recovery in Crude Oil prices, which tends to underpin the commodity-linked Loonie and contributes to the USD/CAD currency pair.

Bank of Canada's Rate Cut Hints and Market Impact

It's worth noting that the Bank of Canada's Governor, Tiff Macklem, recently hinted at the possibility of lowering interest rates in 2024. This news has softened the potential downsides in the USD/CAD pair. People in the market quickly reacted, expecting rate cuts to begin around April, with a total cut of at least 1% by the end of next year. This, in turn, is likely to support the USD/CAD pair. Although, the upticks were short-lived and temporary amid the recent recovery in Crude Oil prices, which usually benefits the Canadian Dollar linked to commodities.

US Dollar Outlook and Fed Presidents' Views on Rate Cuts

Furthermore, Chicago Federal Reserve (Fed) President Austan Goolsbee and Cleveland Fed President Loretta Mester recently disagreed with the market's predictions of early interest rate cuts. This follows New York Fed President John Williams's statement on Friday that it's too early to talk about rate cuts. Moreover, the geopolitical risks are boosting the USD's safe-haven status against the Canadian Dollar. Traders are cautious about making big bets on the USD/CAD pair and are waiting for the latest consumer inflation figures from Canada for clearer direction later in the North American session.

Thus, the mixed views from Fed officials on early rate cuts and geopolitical risks favoring the USD's safe-haven status against the Canadian Dollar are making USD/CAD traders cautious. They're awaiting Canada's consumer inflation figures for clearer direction.

USD/CAD - Technical Analysis

The USD/CAD pair on December 19th exhibits a subtle yet complex trading pattern in the forex market. Currently, it records a marginal decline of 0.05%, trading at 1.3393. This level of trading activity indicates a cautious market sentiment towards the currency pair.

Analyzing the 4-hour chart, the pivot point is established at 1.3180. The pair faces immediate resistance at 1.3277, with further resistance expected at 1.3450 and 1.3550. On the other hand, support levels are found at 1.3012, followed by 1.2847 and 1.2670. These key price levels will be critical in dictating the near-term trajectory of the USD/CAD pair.

The technical indicators provide a nuanced view of the pair's potential direction. The Relative Strength Index (RSI) stands at 38, suggesting a bearish sentiment as it falls below the neutral 50 threshold. However, the Moving Average Convergence Divergence (MACD) presents a value of 0.00062 against a signal line of -0.00373, hinting at possible upward momentum. This contrast in indicators underscores the current market uncertainty.

The 50-Day Exponential Moving Average (EMA) at 1.3391 closely aligns with the current trading price, indicating a balanced market outlook. Notably, the Loonie has entered an oversold zone, and the closing of candles over the $1.3350 level could pivot the pair towards a bullish bias today.

In conclusion, the overall trend for the USD/CAD pair appears to be bullish above the 1.3390 level. The short-term forecast suggests that the pair may test higher resistance levels in the upcoming sessions, particularly if it sustains above the critical EMA and support points. Investors and traders should closely monitor these technical indicators and key levels for insights into potential market shifts.

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Daily Price Outlook

- The USD/CAD pair shows a bearish trend, currently trading at 1.35585 with a 0.12% decrease, facing immediate resistance at 1.3561.

- Technical indicators like RSI at 41 and MACD below its signal line suggest a potential downward momentum.

- Key support at 1.3570 and resistance levels up to 1.3701 are pivotal for determining the pair's short-term direction.

As of December 12, the USD/CAD currency pair is exhibiting a minor downward trend in the Forex market, currently trading at 1.35585, a decrease of 0.12%. Analyzing the 4-hour chart provides a nuanced view of its short-term movements and potential pivot points.

In terms of key price levels, the USD/CAD pair faces immediate resistance at 1.3561. Overcoming this level could lead the pair to test further resistance at 1.3644 and potentially at 1.3701. Conversely, support levels are observed at 1.3781, 1.3504, and 1.3421. These levels will be critical in determining whether the pair can sustain its current momentum or if a reversal is imminent.

From a technical perspective, the Relative Strength Index (RSI) stands at 41, indicating a bearish sentiment in the market. This level suggests that the pair is neither in the overbought nor the oversold territory but leans towards a bearish inclination. The Moving Average Convergence Divergence (MACD) shows a value of -0.0004 with a signal line at 0.00014. The MACD line's position below the signal line hints at potential downward momentum for the USD/CAD pair, reinforcing the bearish sentiment indicated by the RSI.

The 50-Day Exponential Moving Average (EMA) for the pair is currently at 1.3576. Given that the pair's price is hovering below the 50 EMA, it signifies a short-term bearish trend. Furthermore, the chart reveals a downward channel keeping the USD/CAD pair bearish, especially below the 1.3570 support zone. A consistent close below this level could trigger further selling interest in the Canadian Dollar.

In conclusion, the overall trend for the USD/CAD pair appears bearish, particularly if it maintains below the critical 1.3570 level.

USD/CAD - Trade Idea 

Entry Price – Sell Below 1.3570

Take Profit – 1.3510

Stop Loss – 1.3621

Risk to Reward – 1: 1.2

Profit & Loss Per Standard Lot = +$606/ -$505

Profit & Loss Per Mini Lot = +$60/ -$50

Daily Price Outlook

During the European session on Tuesday, the USD/CAD currency pair is failed to stop its three-day losing streak and remained well offered around 1.3560 mark. However, this decline could be associated with the bearish US dollar. The US Dollar Index (DXY) turns negative following two days of gains. Additionally, crude oil prices are holding steady after a three-day winning streak. This stability could be supportive for the Canadian Dollar (CAD) and contributes to the declines in the USD/CAD pair. However, the positive sentiment in WTI prices is driven by confidence in the resilience of the US economy.

WTI Trades Bullish Amid Economic Resilience and Lingering Challenges

It is worth noting that West Texas Intermediate (WTI) is trading around $71.70 per barrel on Tuesday. The recent uptick in oil prices comes after last week's data release, indicating a certain resilience in the United States (US) economy.

However, there are potential challenges for crude oil prices including ongoing concerns about global demand, especially with weaker economic data from China, the world's largest oil importer, and other major economies, which could affect prices. In the meantime, worries persist about oversupply, despite efforts by OPEC+ members to cut production. These factors might put pressure on oil prices in the near term and may help the USD/CAD pair to limit its deeper losses.

USD Index Declines, FOMC Meeting Underway, and BoC Governor's Address Awaited

The US Dollar Index (DXY) is going down and staying below 104.00. This is happening despite stable US Treasury yields. The dollar got a temporary boost from good job numbers in the US. The Federal Open Market Committee (FOMC) is starting a two-day meeting on Tuesday. Most people expect that interest rates will remain unchanged. Investors will pay close attention to the FOMC statement for hints about possible rate changes next year.

Looking at Canada, it's important to note that Bank of Canada (BoC) Governor Tiff Macklem is scheduled to speak on Friday. People in the market will be paying close attention, hoping to gain insights or comments about how the Canadian economy is doing and any potential changes in monetary policy.

USD/CAD - Technical Analysis

As of December 12, the USD/CAD currency pair is exhibiting a minor downward trend in the Forex market, currently trading at 1.35585, a decrease of 0.12%. Analyzing the 4-hour chart provides a nuanced view of its short-term movements and potential pivot points.

In terms of key price levels, the USD/CAD pair faces immediate resistance at 1.3561. Overcoming this level could lead the pair to test further resistance at 1.3644 and potentially at 1.3701. Conversely, support levels are observed at 1.3781, 1.3504, and 1.3421. These levels will be critical in determining whether the pair can sustain its current momentum or if a reversal is imminent.

From a technical perspective, the Relative Strength Index (RSI) stands at 41, indicating a bearish sentiment in the market. This level suggests that the pair is neither in the overbought nor the oversold territory but leans towards a bearish inclination. The Moving Average Convergence Divergence (MACD) shows a value of -0.0004 with a signal line at 0.00014. The MACD line's position below the signal line hints at potential downward momentum for the USD/CAD pair, reinforcing the bearish sentiment indicated by the RSI.

The 50-Day Exponential Moving Average (EMA) for the pair is currently at 1.3576. Given that the pair's price is hovering below the 50 EMA, it signifies a short-term bearish trend. Furthermore, the chart reveals a downward channel keeping the USD/CAD pair bearish, especially below the 1.3570 support zone. A consistent close below this level could trigger further selling interest in the Canadian Dollar.

In conclusion, the overall trend for the USD/CAD pair appears bearish, particularly if it maintains below the critical 1.3570 level.

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Daily Price Outlook

The USD/CAD currency pair maintained its upward trend and gained positive traction around above mid-1.3500s for the second successive day on Tuesday. However, the upward trend in the pair was supported by the downward pressure on Crude Oil prices. Simultaneously, a risk-off sentiment in the market favored the safe-haven USD, further contributing to the upward momentum in the USD/CAD pair.

Factors Pressuring the Canadian Dollar

It's worth noting that Investors are unsure if OPEC+ supply cuts will help much because of a gloomy global economy, which is expected to lower the demand for fuel. This is pushing oil prices back down, nearing the low seen in November. As a result, the Canadian Dollar (Loonie) linked to commodity prices is weakening, providing some support to the USD/CAD pair.

In the meantime, the anticipation that the Bank of Canada (BoC) might start cutting interest rates in the second quarter of 2024 also weighing on the Canadian Dollar and contributing to the gains in the USD/CAD pair.

Factors Influencing USD/CAD Pair Amid Global Uncertainty and Fed Caution

Another factor boosting the USD/CAD pair is the global preference for the US Dollar during uncertain times. However, the Federal Reserve's cautious stance is limiting the USD's potential gains. Many believe that US interest rates have peaked, and the Fed might start easing its monetary policy by March 2024. This belief is causing US Treasury bond yields to drop, restraining aggressive bets on the USD.

Consequently, this could prevent any significant upward movement in the USD/CAD pair, as traders remain cautious amid the dovish outlook for the Fed's future actions.

Looking forward, traders are now eyeing key US economic data, including ISM Services PMI and JOLTS Job Openings, along with US bond yields and overall market sentiment, to gauge USD demand.

USD/CAD - Technical Analysis

The USD/CAD pairing modestly ascended by 0.15%, positioning the pair at 1.35. This uptick marks a cautious optimism in the currency market as traders navigate through key technical junctures.

Technical analysis reveals that the currency pair is grappling with a pivot point at $1.3550. Should the bullish sentiment persist, the loonie could face resistance at $1.3640, with the possibility of extending gains towards $1.3720 and even $1.3765. Conversely, a shift in market dynamics could see the pair seek support at lower echelons, with $1.3480, $1.3395, and $1.3350 acting as potential cushions against further downside.

The Relative Strength Index (RSI) hovers at the midpoint of 49, a reflection of the market's indecision, perched on the brink of a directional bias. While not in the overbought or oversold regions, the RSI's proximity to the 50 mark leaves room for a swing in either direction based on forthcoming market stimuli.

The 50-Day Exponential Moving Average (EMA) stands at $1.3590, a beacon for the pair's short-term trajectory. Currently, the price’s position below the EMA leans towards a bearish outlook, yet the close margin allows for a quick shift should market sentiment change.

Chart patterns have yet to signal a definitive trend, with the absence of a clear symmetrical triangle or upward channel formation. Such patterns could indicate potential bullish momentum, yet their absence leaves the future uncertain.

In conclusion, the USD/CAD’s movement suggests a bearish tilt as long as the price action stays below the 1.3570 threshold. The near-term forecast will hinge on whether the pair can surpass this level, with resistance tests anticipated in the upcoming trading sessions.

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Daily Price Outlook

- USD/CAD climbs slightly to 1.35, indicating mild bullish undertones.

- RSI at 49 signals market indecision; trend direction pending.

- Potential resistance ahead at $1.3640; support lies at $1.3480.

The USD/CAD pairing modestly ascended by 0.15%, positioning the pair at 1.35. This uptick marks a cautious optimism in the currency market as traders navigate through key technical junctures.

Technical analysis reveals that the currency pair is grappling with a pivot point at $1.3550. Should the bullish sentiment persist, the loonie could face resistance at $1.3640, with the possibility of extending gains towards $1.3720 and even $1.3765. Conversely, a shift in market dynamics could see the pair seek support at lower echelons, with $1.3480, $1.3395, and $1.3350 acting as potential cushions against further downside.

The Relative Strength Index (RSI) hovers at the midpoint of 49, a reflection of the market's indecision, perched on the brink of a directional bias. While not in the overbought or oversold regions, the RSI's proximity to the 50 mark leaves room for a swing in either direction based on forthcoming market stimuli.

The 50-Day Exponential Moving Average (EMA) stands at $1.3590, a beacon for the pair's short-term trajectory. Currently, the price’s position below the EMA leans towards a bearish outlook, yet the close margin allows for a quick shift should market sentiment change.

Chart patterns have yet to signal a definitive trend, with the absence of a clear symmetrical triangle or upward channel formation. Such patterns could indicate potential bullish momentum, yet their absence leaves the future uncertain.

In conclusion, the USD/CAD’s movement suggests a bearish tilt as long as the price action stays below the 1.3570 threshold. The near-term forecast will hinge on whether the pair can surpass this level, with resistance tests anticipated in the upcoming trading sessions.

USD/CAD - Trade Ideas

Entry Price – Sell Below 1.3570

Take Profit – 1.34744

Stop Loss – 1.36193

Risk to Reward – 1: 1.9

Profit & Loss Per Standard Lot = +$956/ -$493

Profit & Loss Per Mini Lot = +$95/ -$49

Daily Price Outlook

The USD/CAD currency pair continued its three-day downward trend, remaining below the level of 1.3600 during the European session on Tuesday. However, the reason for its decline can be attributed to the recovery in crude oil prices and risk-on market sentiment, providing support for the Canadian Dollar and contributing to losses in the USD/CAD currency pair. Moreover, the bearish bias in the US dollar was seen as another key factor keeping the USD/CAD currency pair lower.

WTI Price Rebounds, Anticipation Builds for OPEC+ Meeting Impact on USD/CAD Pair

It is worth noting that the Western Texas Intermediate (WTI) price has bounced back after a four-day dip, currently sitting around $75.30 per barrel. Moving on, investors attention is on the upcoming important OPEC+ meeting, with many expecting a decision to further cut and prolong oil production limits. Therefore, this rebound in WTI price is giving a boost to the Canadian Dollar and contributed to the losses in USD/CAD pair.

US Dollar Index Hits Lowest Since August, Fueling USD/CAD Decline

Furthermore, the US Dollar Index (DXY) has hit its lowest point since late August, reaching 103.07 on Tuesday. This decline is fueled by lower US Treasury yields, specifically the 2 and 10-year bond yields, currently at 4.87% and 4.40%. However, the US Dollar faces pressure as traders factor in an anticipated 85 basis points cut by the Federal Reserve (Fed) in 2024. The risk-on sentiment is reinforced by a US Census Bureau report, showing a significant 5.6% drop in New Home Sales for October, below the expected 725K. Therefore the bearish US dollar has played its major role in undermining the USD/CAD pair.

USD/CAD - Technical Analysis

In the foreign exchange market, the USD/CAD pair exhibits a subtle yet notable shift in its recent trading pattern. As of today, the pair is trading at around 1.36, marking a slight decrease of 0.07%. This movement suggests a tempered bearish sentiment towards the US Dollar in comparison to the Canadian Dollar.

From a technical standpoint, the pair is currently navigating through a series of key levels that could influence its short-term trajectory. The pivot point is set at 1.3569, which will play a critical role in determining the immediate directional bias. On the resistance front, USD/CAD faces hurdles at 1.3669, followed by higher resistance levels at 1.3740 and 1.3840. These points are crucial in testing the pair's potential to regain bullish momentum. Conversely, support levels are observed at 1.3495, with subsequent supports at 1.3393 and 1.3296, which could provide stability against further declines.

The Relative Strength Index (RSI) for the pair is currently at 32, hovering near the oversold territory, but not quite there yet. This suggests that while bearish sentiment is present, the market is not in a state of extremity. Additionally, the pair is trading slightly below its 50-Day Exponential Moving Average (EMA) of 1.3600, reinforcing the short-term bearish outlook.

In conclusion, the overall trend for USD/CAD appears to be bearish, particularly if it remains below the 1.3643 level. The short-term forecast indicates that the pair may test its immediate resistance levels in the upcoming sessions. Market participants should closely monitor these technical levels and indicators, as they will be pivotal in shaping the USD/CAD pair's price movements in the near term.

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