USD/CAD Tests Resistance At 1.3550 As Canada’s Economy Is Slowing Down

Key Insights

• USD/CAD is moving higher as traders bet that BoC will be more dovish to support the economy. 
• EUR/USD moved below 1.0350 as Germany’s inflation has started to slow down. 
• USD/JPY rebounded above the 138.50 level.

USD/CAD Rallied To New Highs After Canada’s GDP Reports

USD/CAD gained upside momentum after the release of Canada’s GDP reports. GDP Growth Rate report indicated that third-quarter GDP increased by 0.7% quarter-over-quarter, compared to analyst forecast of 0.4%. On an annualized basis, third-quarter GDP grew by 2.9%, compared to analyst consensus of 1.5%. Preliminary data showed that Canada’s GDP was flat in October.

USD/CAD is currently trying to settle above the resistance at 1.3550. In case this attempt is successful, USD/CAD will move towards the next resistance level, which is located at 1.3570. A move above this level will open the way to the test of the resistance at 1.3600.

On the support side, the nearest support level for USD/CAD is located at 1.3500. If USD/CAD declines below this level, it will head towards the next support at 1.3470. A successful test of the support at 1.3470 will push USD/CAD towards the support at 1.3450.

Other commodity-related currencies are moving higher today as commodity markets rebound. AUD/USD made an attempt to settle above 0.6750, while NZD/USD tested the 0.6250 level.

U.S. Dollar Moved Away From Session Lows

U.S. Dollar Index managed to rebound from session lows and is currently trying to settle above the 106.70 level.

House Price Index declined from 11.9% in August to 11% in September, compared to analyst forecast of 10.5%.

Meanwhile, Treasury yields are moving higher, and the yield of 10-year Treasuries is trying to settle above the 3.75% level. In case this attempt is successful, the U.S. dollar will get more support.

EUR/USD Pulls Back As Germany’s Inflation Declined To 10% In November

EUR/USD faced resistance near 1.0400 and pulled back below the 1.0350 level. Today, EUR/USD traders focused on inflation data from Germany.

Germany’s Inflation Rate declined from 10.4% in October to 10% in November. The report served as a negative catalyst for the euro.

GBP/USD Tests Support At 1.1950

GBP/USD  declined towards the 1.1950 level as traders focused on the broad rebound of the U.S. dollar in today’s trading session.

If GBP/USD manages to settle below 1.1950, it will gain additional downside momentum and move towards the next support level, which is located at 1.1900.

USD/JPY Is Moving Towards The 139 Level

USD/JPY received support near the 138 level and is moving towards 139. Japan’s Unemployment Rate remained unchanged at 2.6% in October, compared to analyst consensus of 2.5%.

Japan’s Retail Sales increased by 4.3% year-over-year in October, while analysts expected that Retail Sales would grow by 4.8%.

In the near term, the general dynamics of the U.S. dollar will remain the key catalyst for USD/JPY as the ultra-dovish policy of the BoJ is not expected to change.

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