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USD/CAD Daily Forecast – U.S. Dollar Rallies After Powell’s Comments

By:
Vladimir Zernov
Published: Nov 30, 2021, 16:51 UTC

USD/CAD settled above 1.2800 and is testing the next resistance level at 1.2825.

USD/CAD

In this article:

Canadian Dollar Declines Against U.S. Dollar

USD/CAD is currently trying to settle above the resistance at 1.2825 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get back above the resistance at 96.25 and made an attempt to settle above the next resistance level at 96.50. If the U.S. Dollar Index manages to settle above 96.50, it will head towards 96.70 which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on commentary from Fed Chair Jerome Powell, which had a major impact on currency dynamics.

Powell stated that economy was strong while inflationary pressures were high. Thus, the Fed may cut its asset purchases sooner than previously expected. In addition, Powell stated that it was the time to “retire” the word “transitory” when talking about inflation.

The markets were shocked by the sudden change of tone. Stocks dived while the U.S. dollar received material support. Interestingly, the yield of 30-year Treasuries keeps moving lower while the yield of 2-year Treasuries is up by 14% today. These moves indicate that traders believe that Fed will start raising rates aggressively, which will put pressure on inflation in the longer-term. This scenario is bullish for the U.S. dollar.

Technical Analysis

usd cad november 30 2021

USD to CAD is testing the resistance level at 1.2825. In case this test is successful, USD to CAD will move towards the next resistance which is located at 1.2850.

A move above 1.2850 will open the way to the test of the resistance level at 1.2890. If USD to CAD manages to settle above this level, it will head towards the next resistance at 1.2915.

On the support side, the previous resistance level at 1.2800 will serve as the first support level for USD to CAD. If USD to CAD moves back below this level, it will head towards the support at 1.2780. A successful test of this level will push USD to CAD towards the support at 1.2760.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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