USDCAD is still trending lower, moving inside a descending channel on its 1-hour chart and bouncing off resistance. Price is now making its way back down towards support at the 1.3300 to 1.3350 area, although it could encounter a near-term floor at 1.3400.
The moving averages are oscillating so the range-bound action could continue. The 100 SMA is slightly above the longer-term 200 SMA so the path of least resistance is to the upside, suggesting that another test of resistance could be in the cards.
Also, stochastic is heading up from the overbought zone to indicate that buyers are regaining control of price action. Price could move up to the 1.3480 area or the top of the channel and perhaps attempt to break higher, depending on the event risks.
Data from the US came in stronger than expected, as the Q3 GDP reading was upgraded from 2.9% to 3.2% while the CB consumer confidence showed a large jump this month. On the other hand, Canada’s current account deficit came in wider than expected.
Canada’s monthly GDP reading is due today and a 0.1% uptick is eyed, lower than the earlier 0.2% expansion. However, the bigger driver of price action could be the OPEC meeting, as an output deal could mean strong gains for the oil-related Loonie.
For now, energy ministers don’t seem ready to reach a deal yet, as Iran has stated that it won’t participate in a production cut. Iraq mentioned that it won’t cooperate unless all the other members are on board. The lack of an agreement could mean more losses for oil and the Canadian dollar.
By Kate Curtis from Trader’s Way