- US job openings unexpectedly rose to 8.10 million in November.
- The US ISM services PMI increased to 54.1, above forecasts of 53.5.
- Canada’s Prime Minister Justin Trudeau announced plans to resign.
The USD/CAD price analysis shows further support for a gradual Fed easing cycle. The US released upbeat data on Tuesday, which boosted the dollar against the Canadian dollar. However, political developments in Canada have allowed the CAD to make a new peak.
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The greenback soared on Tuesday after two separate economic reports revealed continued resilience in the US economy. Notably, US job openings unexpectedly rose to 8.10 million in November, beating estimates of 7.73 million. The figures indicated higher-than-expected demand for labor in November and a resilient labor market. This will likely keep Fed policymakers cautious.
Meanwhile, another report showed that business activity in the US services sector jumped more than expected. The ISM services PMI increased to 54.1, above forecasts of 53.5. A resilient economy shows that the US central bank will keep rates at restrictive levels. As a result, the dollar rose. Traders will now await the FOMC meeting minutes for more clues on future Fed moves.
On the other hand, although the loonie gave up some of Monday’s gains, it remained strong. Bullish sentiment soared after Prime Minister Justin Trudeau announced plans to resign. Therefore, there is more clarity about the future, with markets anticipating an election before October. Moreover, they expect a win for the opposition Conservatives.
USD/CAD key events today
- US ADP non-farm employment change
- US unemployment claims
- FOMC Meeting Minutes
USD/CAD technical price analysis: Bears trigger range breakout
On the technical side, the USD/CAD price has made a lower low after breaking below the 1.4351 range support level. However, it has rebounded to retest the 30-SMA resistance and the 1.4351 key level.
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Initially, the price was stuck in a range between the 1.4450 resistance and the 1.4351 support levels. However, bullish momentum was fading despite attempts to break out of the range resistance. The RSI made a bearish divergence, which later played out as bears broke out of the consolidation area.
If bears are ready to start a trend, the price will respect the 30-SMA resistance and bounce lower to make new lows. In such a case, USD/CAD would target the 1.4200 key psychological level.
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