After the comments from FED chairman Powell last Wednesday, which seem to weigh heavy on the USD, and couldn’t even allow the Greenback to profit from a better than expected ISM Manufacturing reading on Monday, it is not even a question that US data around the ADP employment situation and ISM Non-Manufacturing can convince today, and at least stabilize the USD a little.
Source: Economic Events 05 December 2018 – Admiral Markets’ Forex Calendar
There is also the BoC rate decision. So far, no surprises should be expected, the likelihood of the BoC holding rates at the current level of 1.75% is very high (> 95%). What Forex traders will look at is whether there is any shift to the BoC statement, and for any signals on whether a rate hike in January, after the plunge in oil prices over the last two months, is still on the cards.
Source: Admiral Markets MT5 with MT5SE Add-on USDCAD 4-Hour chart (between 10 October 2018 to 04 November 2018). Accessed: 04 November 2018 at 11:00 PM GMT – Please Note: Forecasts such as this are not a reliable indicator of future results, or future performance.
To make long things short: if US data comes in as expected, and the USD can catch a bid with 10-year-US-yields probably seeing a bounce back above 3%, while the BoC presents itself neutral, perhaps with a slight dovish touch due to the developments in oil prices, another attempt to break above 1.3400 is on the table. On the other hand: if the BoC is completely neutral in its rhetoric, and US data disappoints, pushing the USD/CAD currency pair below 1.3100/3130, another attempt to break 1.3400 before Christmas and right before the end of the year could also be on the table.
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