This week, the United States dollar (USD) rose after the US dollar strengthened following the announcement of the initial durable goods data in November. As usual, the significant upward adjustment from 0.3% to 0.8% drives the greenback higher, making the real figure less significant.
The US Dollar's Dominance Could Ease
With a few small second-tier data pieces still pending, the US financial calendar will begin to stabilize as of right now. With many bond auctions, the United States Treasury still has a lot of work to do. In the meantime, US markets are exhaling with relief as the government closure was avoided just in time for the Christmas and New Year's festivities.
In November, US durable products orders shrank 1.1%, reversing the previous month's corrected 0.8% increase and falling well short of the projection of -0.4%.
What's For The Canadian Dollar?
In October, Canada's GDP surpassed estimates and reached its highest level since June. In November, the Canadian Raw Material Price Index declined more than anticipated. In November, US durable products orders had a significant decline, the fastest MoM decline since July.
According to Daily Digest industry movers, market volumes declined before the Christmas vacation. October saw a 0.3% MoM increase in Canadian GDP, exceeding the predicted fall of 0.1%. Additionally, the September print was changed from 0.1% to 0.2%.
The raw material index of prices for Canada shrank by 0.5% in November, which was far less than the 4.0% rise recorded in the prior month and much less than the 0.6% increase that was anticipated.
In November, Canadian manufacturing product prices increased by 0.6%, less than the 1.2% increase in the month before but higher than the expected 0.3%, despite the significant impact on raw materials.
Overall market mood is being hampered by holiday trade volumes and a wide miss in the United States' long-term goods orders, even while Canadian GDP and inflation data are improving.
USDCAD Technical Analysis
In the daily chart, the USDCAD pair appears to be challenging the upper limit of a rising channel on the daily chart, which shows a growing bullish bias.
A negative correction is possible as the 14-day Relative Strength Index (RSI) stays over 70, indicating an overbought situation. On the other hand, positive sentiment may be strengthened if the RSI stays close to this level.
The USDCAD pair also maintains its positive trend and sturdy short-term price pressure by trading above the Moving Average wave and 50-day EMA. This alignment indicates strong purchasing demand and the possibility of additional upward momentum.
On the positive side, the USDCAD currency pair makes an effort to recover and surpass the immediate opposition at the upper limit of 1.4400 points in the ascending trend. A significant break above this zone would support the bullish outlook and pave the way for a possible retake of the multi-year peak at the level of 1.4467, which was reached on December 19.
In terms of support, the USDCAD pair may initially test the 1.4335 static level. A selling pressure below this line could lower the price to the 1.3922 high volume line.
