USDCAD Hits Seven-Week Lows, U.S. Manufacturing PMI Disappoints

USDCAD hit today new seven-week lows as the risk appetite has returned to the forex market, after the Phase One trade agreement between the two superpowers.

Fed kept its interest rates unchanged the previous week, while the dot plot now suggests that the Fed will continue its policy unchanged through 2020.

Bank Of Canada in its policy meeting also kept it’s benchmark interest rates steady as expected by analysts. The interest rate now stands at 2% and the deposit rate is 1.5%.

U.S. Manufacturing PMI Disappoints

On the data front today, the U.S. Manufacturing PMI came down to 52.5 in November below the forecast of 52.6. The PMI Composite came in at 52.2 above estimates of 51.9 in December. The Services PMI came in at 52.2 topping forecasts of 51.9. Earlier the U.S. NY Empire State Manufacturing Index came in at 3.5 below market consensus of 4 in December.

In Canada the Foreign Portfolio Investment in Canadian Securities jumped from $4.76B to $11.32B in October, the Canadian Portfolio Investment in Foreign Securities increased from previous $-2.4B to $2.03B in October.

Read our Best Trading Ideas for 2020.

USDCAD Technical outlook

USDCAD failed on Friday to break above the 50-day moving average after the headlines on trade deal between the U.S. and China. The selling pressure continue today hitting the daily low and seven-month low at 1.3114.

The momentum is bearish now for the pair as it trades below all major daily moving averages. The first support stands at 1.3114 the daily low, while a break below might accelerate the downward move to 1.3073 the low from October 30th.

On the upside immediate resistance for USDCAD will be met at 1.3185 the daily top. Selling pressure also awaits at 1.3203 the 50-day moving average. Next level on the upside for buyers to watch is the 1.3230 the 100-day moving average.

On the other hand immediate resistance for USDCAD stands at 1.3239 the daily high while the next resistance stands at 1.3264 the high from December 9th. If we have a break above that level, the next target to the upside is the 1.3276 the 200-day moving average.

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