USD/CAD Weekly Forecast: Trump Proposals Increase Greenback Bulls…

• Trump’s win has modified the outlook for the economic system and inflation.

• Knowledge on US inflation revealed that worth pressures elevated as anticipated. 

• US gross sales jumped greater than anticipated.

The USD/CAD weekly forecast stays shiny, with the US greenback scaling a one-year excessive on Trump’s coverage proposals.

Ups and downs of USD/CAD

The loonie had a bullish week because the greenback soared to a one-year excessive in opposition to its friends on Trump optimism. Market contributors continued absorbing the current US election final result, which boosted the US greenback. Trump’s win has modified the outlook for the economic system and inflation. Consultants consider the economic system will develop quickly, and inflation will spike. Subsequently, the Fed would possibly pause its fee cuts. 

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In the meantime, information on inflation revealed that worth pressures elevated as anticipated. Nevertheless, rate-cut bets dropped sharply after Powell stated there was no hurry to decrease borrowing prices. Different information confirmed that gross sales jumped greater than anticipated, indicating strong client spending.

Subsequent week’s key occasions for USD/CAD 

Subsequent week, Canada will launch key figures on inflation and retail gross sales that can form the outlook for Financial institution of Canada fee cuts. Inflation in Canada has eased considerably and is now at 1.6%, inside the central financial institution’s goal. Consequently, the Financial institution of Canada is extra centered on preserving progress, which has deteriorated.

Nonetheless, the low inflation can be piling stress on policymakers to decrease borrowing prices. Market contributors are already pricing extra aggressive BoC fee cuts. Subsequently, cooler-than-expected figures will weigh on the Canadian greenback.

In the meantime, the retail gross sales report will present the well being of the buyer and the economic system at giant, additional shaping the outlook for fee cuts.

USD/CAD weekly technical forecast: Bearish RSI divergence

On the technical aspect, the USD/CAD worth has made a brand new excessive after respecting the 22-SMA as assist. The value trades far above the SMA, indicating a strong bullish bias. On the similar time, the RSI trades within the overbought area, suggesting sturdy bullish momentum. 

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The value not too long ago broke above the 1.3951 resistance stage and rose to make a brand new excessive close to the 1.4101 key stage. Nevertheless, whereas the worth made a better excessive, the RSI made a decrease one, indicating weaker bullish momentum. Subsequently, subsequent week, USD/CAD would possibly pull again subsequent week to retest the 1.3951 assist or the 22-SMA line. Nonetheless, the bullish development will proceed if the worth stays above the SMA.

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