Image Source: DepositPhotosThe USD/CAD pair trades in negative territory for the third consecutive week during the early European session on Thursday. The downward momentum of the pair is backed by the softer US Dollar (USD) and the lower US Treasury bond yields. The last week of 2023 is likely to be quiet as traders turn to holiday mode. At press time, USD/CAD is trading at 1.3204, losing 0.02% on the day.

On Wednesday, the US Richmond Fed Manufacturing Index fell to 11 in December versus -5 in November, weaker than the expectation of a 7 drop. Meanwhile, the USD edges lower to its lowest level since July near 100.80. That being said, the decline in November’s US Core Personal Consumption Expenditure Price Index (Core PCE) triggered the bets on early rate cuts by the Federal Reserve (Fed) in 2024. According to the CME Fedwatch tool, markets are now pricing in over 88% of a rate cut starting in March 2024, with more than 150 basis points (bps) of cuts priced in for next year.

On the Loonie front, the rebound in oil prices lifts the Canadian Dollar (CAD) and acts as a headwind for the USD/CAD pair. Apart from this, the Bank of Canada (BoC) said at a recent meeting that an additional rate hike cannot be ruled out. However, the markets anticipate that the odds of another rate hike have decreased, and investors widely expect its next move will be to cut interest rates sometime next year.

Moving on, market players will monitor the US Initial weekly Jobless Claims, Trade Balance for November, and Pending Home Sales on Thursday. These figures might not have a significant impact on the market amid the light trading volume. USD/CAD

OVERVIEW Today last price 1.32 Today Daily Change -0.0007 Today Daily Change % -0.05 Today daily open 1.3207

 

TRENDS Daily SMA20 1.3437 Daily SMA50 1.3616 Daily SMA100 1.3593 Daily SMA200 1.3493

 

LEVELS Previous Daily High 1.3219 Previous Daily Low 1.3178 Previous Weekly High 1.3409 Previous Weekly Low 1.3219 Previous Monthly High 1.3899 Previous Monthly Low 1.3541 Daily Fibonacci 38.2% 1.3203 Daily Fibonacci 61.8% 1.3194 Daily Pivot Point S1 1.3183 Daily Pivot Point S2 1.316 Daily Pivot Point S3 1.3142 Daily Pivot Point R1 1.3225 Daily Pivot Point R2 1.3243 Daily Pivot Point R3 1.3267

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