USD/CAD Outlook: US Treasury Sec. Nomination Boosts Greenback…

• The greenback began the week sturdy as markets reacted to Trump’s selection for Treasury Secretary.

• Canada’s inflation elevated by zero.Four%, above estimates of zero.three%.

• Retail gross sales in Canada jumped by zero.Four% in September.

The USD/CAD outlook reveals a rebound within the pair because the greenback rallies after Trump selected a brand new Treasury Secretary. Nonetheless, the pair remained close to lows marked final week when the Canadian greenback soared after upbeat financial information. 

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The greenback began the week sturdy as markets reacted to Trump’s selection for Treasury Secretary. Scott Bessent has been a supporter of Trump’s tariff coverage proposals. Furthermore, he has overtly supported a stronger greenback, making his nomination bullish for the forex.

Markets are paying shut consideration to developments within the US after Trump’s win. The president-elect will take workplace in January and would possibly begin pushing for coverage adjustments. Consultants have famous that the Republican Occasion holds most seats in each homes of Congress, making it straightforward for Trump to make coverage adjustments. 

In the meantime, the Canadian greenback gave up a few of final week’s positive aspects however remained close to its highs. The loonie had a powerful week the place financial information lowered the chance of one other super-sized charge reduce in December. The Financial institution of Canada lowered borrowing prices by 50-bps in October as information confirmed slower financial development. Furthermore, policymakers signaled extra charge cuts sooner or later, prompting markets to cost one other large transfer.

Nonetheless, information final week revealed that inflation elevated by zero.Four%, above estimates of zero.three%. On the identical time, retail gross sales jumped by zero.Four% in September, with the core determine rising by zero.9%. Furthermore, estimates confirmed a zero.7% enhance in October. In consequence, markets lowered the chance of one other 50-bps charge reduce in December. 

USD/CAD key occasions at the moment

The pair would possibly begin the week slowly, as merchants don’t count on key reviews from Canada or the US. 

USD/CAD technical outlook: Bears gear up for a break under 1.3951

On the technical aspect, the USD/CAD worth has paused close to the 1.3951 help stage. However, the bias is bearish because it trades under the 30-SMA, with the RSI in bearish territory. The development lately reversed when the value paused on the 1.4100 resistance stage. 

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Bears confirmed a reversal once they pushed under the 30-SMA and the bullish trendline. Nonetheless, they have to now make decrease highs and lows to proceed the downtrend. Subsequently, USD/CAD would possibly break under 1.3951 to retest the 1.3850 help stage.

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