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USDCAD at Daily Low Ahead of BoC Decision

USDCAD gives up 0.17% at 1.3272, close to daily low in quiet trading as traders await the Bank Of Canada decision on interest rates.

Another disappointment came from the United States as the ADP Employment Change came in 67,000 below expectations of 140,00 in November. The U.S. MBA Mortgage Applications dropped to -9.2% in November 29th from the previous 1.5%.

Investors await now the ISM Non-Manufacturing PMI from USA. Expectations are that the ISM Non-Manufacturing PMI will come at 54.5, the previous reading was at 54.7.

From Canada, the Labor Productivity (quarter over a quarter) came in at 0.2% below forecasts of 0.8% in the third quarter.

Last week, Statistics Canada reported that Canada’s current account deficit widened to C$9.86 billion in the 3Q from C$6.74 billion deficit in the 2Q the expectations were for -14.6 billion, the Current Account came in at -9.86B, below analysts forecasts of -9B for the third quarter.

Meanwhile, crude oil prices trade higher for the third day in a row, at $57.91 per barrel putting pressure to Canadian dollar.

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Bank of Canada  expected to keep interest rates unchanged

The Bank of Canada is expected to maintain its interest rates stable at 1.75%. In its last policy meeting, BoC pointed out that the risks are to the downside with escalating China-US trade tensions, weak business investment and falling crude oil prices. BoC will possibly wait until the Q1 next year before easing.

Federal Reserve chair Jerome Powell, reiterated his optimistic view of the U.S. economy and also said that the Fed’s three rate cuts this year have helped real estate, contributing to the economy’s longest expansion.

USDCAD Capped at 1.3325

USDCAD rejected for one more time at 1.3325 strong resistance for the pair as it failed several times during November. The pullback today breached the 200-day moving average and trading at the daily low. USD is under selling pressure after a series of disappointing economic data.

The technical outlook for USDCAD is neutral now for the pair as sellers looking for a break below the first resistance at 1.3271 the daily low. A break below that support zone will open the way for a move down to the 100-day moving average at 1.3225. In that case bears will be in control and might push the USDCAD down to 1.3189 the low from November 19th.

USDCAD Intraday Resistance at 1.3297

On the other hand, USDCAD immediate resistance stands at 1.3297 today’s top, a break above that level will target the next critical resistance at 1.3327 the high from November resistance area, before any attempt to 1.3345 the high from October 10th.More content